Major financing news from the company it's associated with helped drive the price of Toncoin (TON +0.00%) well higher on Wednesday. As of 4 p.m. ET, the coin was up by nearly 14% in price and outperforming a great many other cryptocurrencies. It was also trouncing quite a few stocks, as the S&P 500 (SNPINDEX: ^GSPC) had closed the trading day 0.6% lower.
$1.5 billion worth of support
Although it's now a separate entity, Toncoin was originally developed by the team behind secure-messaging app Telegram. This is why the coin is used as the native currency for Telegram services.
Image source: Getty Images.
This connection is a major reason for Toncoin's Hump Day surge. According to a report published that day in The Wall Street Journal, Telegram is seeking to raise a minimum of $1.5 billion in debt financing -- and lenders are lining up to provide it. This is despite the fact that Telegram co-founder and CEO Pavel Durov is facing serious criminal charges for a range of offenses both related to his company, and outside it.
Citing unnamed "people familiar with the matter," the financing would take the form of a bond issue. The bonds would have a five-year maturity, and yield 9%, and their proceeds would be used to retire debt from a 2021 bond issue floated by Telegram.
The article's sources said that U.S. financial services heavyweight BlackRock and Mubadala (Abu Dhabi's state-owned investment management company), both existing Telegram bondholders, are among the entities interested in buying into the new issue. Other interested parties include hedge fund Citadel.
CRYPTO: TON
Key Data Points
What's good for the balance sheet is good for the crypto
That said, $1.5 billion sure is a lot of financial support for a business, and of course, the stronger Telegram's balance sheet, the more secure Toncoin should be. I don't think this news bolsters the case for Toncoin as a useful currency outside the Telegram ecosystem; however, it's encouraging that the business it's closely associated with will soon receive a pile of new borrowings.
