KindlyMD borrows $210 million from Kraken in new Bitcoin-backed credit deal

A Securities Exchange Commission filing on Tuesday revealed that KindlyMD (NAKA) agreed to borrow $210 million from Kraken. The initiative makes the crypto exchange NAKA’s fourth provider to help service its existing loan from Antalpha Digital, which was used to repay a loan from Two Prime Lending.

The Bitcoin treasury firm said the one-year credit signed by its subsidiary Nakamoto Holdings will mature next year on December 4. According to the SEC filing, the loan also bears an annual interest of 8%. The filing revealed that the initiative allows the firm to borrow fiat or virtual assets occasionally under individual loan term sheets.

KindlyMD backs its loan in Bitcoin

KindlyMD said the $210 million loan is backed entirely by Bitcoin. The BTC treasury company will also be required to post collateral of around $323.4 million. The collateral stands at approximately 3,500 BTC at current prices. 

At the time of publication, Bitcoin is trading at around $91,934, up nearly 2% in the last 24 hours. On-chain data also revealed that BTC has plummeted more than 13.2% in the last 30 days. 

According to BitcoinTreasuries, KindlyMD currently owns about 5,398 Bitcoin, making it the 19th-largest corporate BTC holder. Michael Saylor’s Strategy leads with 660,624 Bitcoins in its holdings, followed by MARA Holdings and Twenty One Capital with 55,250 BTC and 43,514 BTC, respectively.

Kraken joins other lenders with similar credit initiatives this year, including previous financings from Yorkville Advisors, Two Prime, and Antalpha Digital. The Bitcoin Treasury company partnered with Antalpha in early October to finance $250 million in debt. 

KindlyMD announced that the digital asset financing will be used to create a new treasury tool for Bitcoin-focused firms. The company also agreed to a five-year convertible note issuance to Antalpha. The proceeds from the issuance will be used to refinance a previous $203 million BTC-secured credit line from Two Prime Lending.

The provider of integrated healthcare services partnered with Two Prime Lending in early October for credit purposes. The firm said proceeds from the initiative will be used to service a $200 million convertible debenture. The loan also has an interest rate of 1.5%.

Tyler Evans, CIO of KindlyMD, acknowledged that the financing and the redemption of the convertible note marked a crucial step for the firm to enhance its balance sheet. The firm fully repaid the redemption for the convertible debenture on September 30.

Bailey expects a long-term series of financing to boost KindlyMD’s balance sheet

Bailey said that the initiative helps the firm address today’s financial needs and also helps lay the foundation for future structures tailored for Bitcoin treasury companies. He also expects a long series of initiatives aimed to benefit the firm’s portfolio, its shareholders, and the Bitcoin ecosystem at large.

The initiative follows Bailey’s September 15 Shareholder Letter, which highlighted the need to establish alignment among shareholders and financial partners to support KindlyMD’s long-term investment strategy. He added that the Bitcoin treasury firm has transitioned away from prior financing agreements that didn’t match KindlyMD’s strategy and is now focused on collaborations that share its long-term vision.

Bailey revealed that the company’s stock has rallied over the past month after the merger with Nakamoto Holdings. He maintained that KindlyMD believes in Bitcoin’s long-term potential as the global reserve asset.

Bailey also championed the company’s resilience through the previous Bitcoin cycles, saying that it will make its shareholders a tour de force in the next adoption cycle.

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