Key Highlights

• HIVE Digital completed a $130 million offering of 0% exchangeable senior notes due 2031, including an exercised $15 million purchase option.

• The notes convert at an initial rate of 206.9429 Common Shares per $1,000, equivalent to an exchange price of approximately US$4.83 per share, reflecting a 27.5% premium over the recent market price.

• Capped call transactions were structured at an initial price of $8.5275 per share, representing a 125% premium, with total costs of $15.7 million covered by existing cash reserves.

HIVE Digital Technologies Ltd. (TSX-V: HIVE) has successfully issued $130 million in 0% exchangeable senior notes, set to mature on July 1, 2031. The company also exercised an option to sell an additional $15 million of notes to the initial purchasers, bringing the total offering to its maximum authorized amount.

Note Structure and Security

The notes represent unsecured senior obligations of HIVE Digital and are backed by the company’s credit. They do not bear regular interest payments, and the principal amount remains fixed until maturity or earlier conversion, redemption, or repurchase. The terms of the notes are governed by an indenture filed with securities regulators.

Conversion Terms and Share Premium

Holders of the notes may exchange them for cash, HIVE Digital’s Common Shares, or a combination of both. The initial exchange rate is set at 206.9429 Common Shares for every $1,000 of principal, which corresponds to an exchange price of about US$4.83 per share. This rate includes a 27.5% premium over the closing share price on June 25, 2026, providing a buffer against short-term volatility while offering upside potential.

Redemption and Early Repurchase Provisions

HIVE Digital retains the right to redeem the notes at 100% of their principal amount beginning July 5, 2029, provided the company’s share price reaches at least 130% of the exchange price for 20 trading days within a 30-day period. Noteholders may also require the company to repurchase their notes at 100% of the principal amount on July 1, 2030, or in the event of certain corporate changes, ensuring liquidity and investor protection.

Capped Call Strategy to Manage Dilution

To mitigate potential dilution from note conversions, HIVE Digital entered into capped call transactions with financial counterparties. The base agreements were executed on June 25, 2026, with additional agreements finalized the following day after the $15 million option was exercised. These transactions set a cap price of $8.5275 per share, which is 125% above the June 25, 2026 closing price, aligning with the company’s long-term share price objectives.

Costs and Funding of Capped Calls

The base capped call transactions required an upfront payment of approximately $13.9 million, while the additional agreements cost around $1.8 million, totaling $15.7 million. These expenses were funded from the company’s existing cash reserves, ensuring no additional debt or equity issuance was required. The capped call agreements operate independently of the notes, meaning they do not affect the rights or terms available to noteholders.

Potential Share Issuance Impact

If all notes are converted at the maximum exchange rate, HIVE Digital could issue up to 26,902,577 Common Shares. This figure may be adjusted for corporate actions such as stock splits, dividends, or other events that impact share count, ensuring the conversion terms remain fair to both the company and investors. The offering reflects HIVE Digital’s strategy to access capital while managing shareholder dilution and supporting its growth initiatives in the digital asset and blockchain technology sectors.

 

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.