Strategy is set to redeem $1.5 billion of its 2029 convertible debt using cash on hand or bitcoin disposals.

Strategy, led by Michael Saylor, is moving to scale back its convertible debt as part of ongoing efforts to realign its balance sheet around its bitcoin treasury strategy.

Disclosure: The author holds shares in Strategy (MSTR).

In a filing released Friday, the company said it has agreed to repurchase approximately $1.5 billion of its outstanding 0% Convertible Senior Notes due 2029 through privately negotiated deals with certain investors.

The transaction is expected to cost about $1.38 billion in cash, indicating the notes are being retired at a discount to face value.

Originally issued in November 2024 with a total size of $3 billion, the zero-coupon notes mature on Dec. 2, 2029, and carry a conversion price of $672.40 per share—well above the current share price of $183.

The final repurchase price may be adjusted and will depend in part on the volume-weighted average price of Strategy’s Class A stock over a defined measurement window.

Strategy plans to fund the buyback using a combination of existing cash, proceeds from equity issuance, and potentially bitcoin sales. The transaction is expected to settle around May 19, after which the repurchased notes will be cancelled, reducing the remaining 2029 notes outstanding to roughly $1.5 billion.

Shares of Strategy (MSTR) were down 2% in pre-market trading, tracking a decline in bitcoin, which slipped to around $80,400 overnight.