Cipher Digital Convertible Notes: $850M At 0% Due 2032

Cipher Digital has closed an $850 million sale of zero-coupon convertible notes, and the paperwork landed on EDGAR at 01:26 UTC on October 17. Pricing was October 13, issuance October 16. Anyone looking for the old name should know that Cipher Digital was Cipher Mining Inc. until February 23, 2026.

Nobody gets a coupon on these Cipher Digital convertible notes. They run to November 1, 2032. Each $1,000 of principal turns into 65.3211 shares if the holder converts, a price the filing puts near $15.31 a share. When that happens Cipher picks how to pay: cash, stock or both.

Item 1.01 of the 8-K, where the terms start. Source: SEC EDGAR.

What 65.3211 shares per note adds up to

Multiply the conversion rate by the size of the deal and the notes stand for about 55.5 million shares. The initial purchasers also hold a 13-day option for another $150 million of notes. If they use it, the share count rises to about 65.3 million. Those two totals are our arithmetic from the filing, not figures the company printed.

Redemption comes late. Cipher can call the notes for cash from November 5, 2029. It needs its stock above 130% of the conversion price on at least 20 of 30 trading days to do so.

Holders get two exits of their own. On November 1, 2030 they can require repayment at par. They can also demand repurchase at par after a fundamental change. The filing defines that to include certain mergers and a delisting of the common stock.

An $89.7 million hedge on the convertible notes

On October 13 the company bought capped calls from the initial purchasers and other banks. They are meant to cut dilution when the notes convert. The cap price is $28.35, which the filing calls a 150% premium to the October 13 closing price.

Work backwards and that close was $11.34. The conversion price then sits about 35% above it. The capped calls on the Cipher Digital convertible notes cost approximately $89.7 million, so roughly 10.6 cents of every dollar raised went to the hedge.

The capped call and exchange sections. Source: SEC EDGAR.

Older convertible notes get swapped for stock

The same day, Cipher agreed to trade part of its 1.75% notes due 2030 for common stock. Holders handed in about $165.9 million of principal and received roughly 40.7 million shares, interest included. That exchange closed on October 16. Only about $6.6 million of the 2030 notes remain, on unchanged terms.

Where the convertible debt stack stands

Add the new notes to the 0% notes due 2031 ($1.3 billion) and the leftover 2030 notes. Convertible debt then reaches about $2.16 billion before any option exercise.

A $200 million senior secured revolving credit facility ranks ahead of the notes. The notes themselves are senior and unsecured. U.S. Bank Trust Company is the trustee.

A separate notice under Item 7.01 changes how the older series settle. Conversions of the 2030 and 2031 notes will now default to physical settlement, meaning shares. Cipher can still pick another method for a specific conversion.

This report covers a financing filing and is not advice on Cipher shares.