Strategy, led by Michael Saylor, is taking steps to reduce its convertible debt load as it continues to restructure obligations tied to its bitcoin treasury strategy.

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

The company said Friday it has reached agreements to repurchase roughly $1.5 billion of its 0% Convertible Senior Notes due 2029 through privately negotiated transactions with select holders.

Strategy expects to pay approximately $1.38 billion in cash, suggesting the debt is being retired at a discount to its face value.

The notes were originally issued in November 2024 with a total size of $3 billion. They 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 could be adjusted and will partly depend on the volume-weighted average price of Strategy’s Class A stock over a specified period.

To fund the buyback, Strategy plans to use a mix of cash on hand, proceeds from stock sales, and potentially bitcoin sales. The transaction is expected to close around May 19, after which the repurchased notes will be cancelled, leaving about $1.5 billion of the 2029 notes outstanding.

Strategy’s common shares (MSTR) declined 2% in pre-market trading, alongside a drop in bitcoin to around $80,400 overnight.