IREN LtdIREN
IREN Ltd Debt Disclosure
Note 18. Convertible notes payable
Details of the Group’s notes payable are as follows:
2030 Notes | 2029 Notes | Total | ||||||||||||||||||
| Balance as at 1 July 2024 | $ | — | $ | — | $ | — | ||||||||||||||
| Initial recognition | 440,000 | 550,000 | 990,000 | |||||||||||||||||
| Capital raising costs | (13,420) | (15,215) | (28,635) | |||||||||||||||||
| Interest expenses | 9,401 | 1,052 | 10,453 | |||||||||||||||||
| Coupon interest payable | (8,144) | (909) | (9,053) | |||||||||||||||||
| Balance as at 30 June 2025 | $ | 427,837 | $ | 534,928 | $ | 962,765 | ||||||||||||||
The Company accounts for all of its notes payable in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470”), ASC 815, and ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). The Company evaluated all of its notes payable to determine if there were any embedded components that qualified as derivatives to be separately accounted for.
2030 Convertible Senior Notes
In connection with the offering of the 2030 Notes, the Group has identified a single embedded derivative related to the conversion option and redemption right, which was combined with the debt host as a single instrument. Additionally, the Group separately entered into Capped Call Transactions and a Prepaid Forward Contract with a financial institution. The net proceeds from the sale of the 2030 Notes were approximately $311,646,000 after deducting offering and issuance costs related to the 2030 Notes, the Capped Call Transactions costs and the Prepaid Forward Contract costs.
The 2030 Notes were issued pursuant to an indenture, dated December 6, 2024, between the Group and U.S. Bank Trust Company, National Association, as trustee. The Group pays interest on the 2030 Notes semi-annually in arrears at a rate of 3.25% per annum on June 15 and December 15 each year. The 2030 Notes will mature on June 15, 2030, unless earlier purchased, redeemed or converted. The 2030 Notes are convertible based upon an initial conversion rate of 59.4919 shares of the Group’s ordinary shares per $1,000 principal amount of 2030 Notes (equivalent to a conversion price of approximately $16.81 per share of the Group’s ordinary shares). The conversion rate and conversion price will be subject to customary adjustment upon the occurrence of certain specified events. The Group will settle any conversions of the 2030 Notes in cash, ordinary shares or a combination thereof, with the form of consideration determined at the Group’s election.
Holders may convert all or a portion of their 2030 Notes only under the following circumstances: (1) During any calendar quarter commencing after the calendar quarter ending on March 31, 2025, if the last reported sale price per the Group’s ordinary share, no par value, exceeds 130% of the conversion price for each of at least 20 trading days during the 30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the conversion rate on such trading day; (3) upon the occurrence of specified corporate events; (4) If the Group call such notes for redemption; or (5) at any time from, and including, March 15, 2030 until the close of business on the second scheduled trading day immediately before the maturity date. Holders of 2030 Notes who convert their 2030 Notes in connection with a notice of a redemption or a make-whole fundamental change may be entitled to a premium in the form of an increase in the conversion rate of the 2030 Notes.
The Group may not redeem the 2030 Notes prior to December 20, 2027. On or after December 20, 2027, the Group may redeem for cash all or part of the 2030 Notes if the last reported sale price of the Group’s ordinary shares equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Group provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Group provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any.
The Group determined that the 2030 Notes contained a single combined embedded derivative for the convertible option (holder's option to exchange the notes for a variable number of the Group's ordinary shares) and redemption right (Group's ability to redeem the notes at their discretion). The Group determined that these embedded features should not be separated from its host contract and accordingly, are accounted for as part of the debt host. The fair value of the debt host, net of unamortized debt issuance costs, is accreted at an effective interest rate of 3.87% over the term of the instrument and will be accreted up to the principal amount at maturity. During the years ended June 30, 2025 and 2024, the Group amortized total debt issuance costs and debt discount of $1,257,000 and nil, respectively, which was recorded as interest expense in the Consolidated Statements of Operations and Comprehensive Income (Loss).
2029 Convertible Senior Notes
In connection with the offering of the 2029 Notes, the Group has identified a single embedded derivative related to the conversion option and redemption right, which was combined with the debt host as a single instrument. Additionally, the Group has separately entered into Capped Call Transactions and a Prepaid Forward Contract with a financial institution. The net proceeds from the sale of the 2029 Notes were approximately $392,393,000 after deducting offering and issuance costs related to the 2029 Notes, the Capped Call Transactions costs and the Prepaid Forward Contract costs.
The 2029 Notes were issued pursuant to an indenture, dated June 13, 2025, between the Group and U.S. Bank Trust Company, National Association, as trustee. The Group pays interest on the 2029 Notes semiannually in arrears at a rate of 3.5% per annum on June 15 and December 15 each year (commencing December 15 2025). The 2029 Notes will mature on December 15, 2029, unless earlier purchased, redeemed or converted. The 2029 Notes are convertible based upon an initial conversion rate of 73.3299 shares of the Group’s ordinary shares per $1,000 principal amount of 2029 Notes (equivalent to a conversion price of approximately $13.64 per share of the Group’s ordinary shares). The conversion rate and conversion price will be subject to customary adjustment upon the occurrence of certain specified events. The Group will settle any conversions of the 2029 Notes in cash, ordinary shares or a combination thereof, with the form of consideration determined at the Group’s election.
Holders may convert all or a portion of their 2029 Notes only under the following circumstances: (1) During any calendar quarter commencing after the calendar quarter ending on September 30, 2025, if the last reported sale price per the Group’s ordinary share, no par value, exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the conversion rate on such trading day; (3) upon the occurrence of specified corporate events; (4) If the Group call such notes for redemption; or (5) at any time from, and including, September 17, 2029 until the close of business on the second scheduled trading day immediately before the maturity date.
Holders of 2029 Notes who convert their 2029 Notes in connection with a notice of a redemption or a make-whole fundamental change may be entitled to a premium in the form of an increase in the conversion rate of the 2029 Notes.
The Group may not redeem the 2029 Notes prior to June 20, 2028. On or after June 20, 2028, the Group may redeem for cash all or part of the 2029 Notes if the last reported sale price of the Group’s ordinary shares equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Group provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Group provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any.
The Group determined that the convertible note contained a single combined embedded derivative for the convertible option (holder's option to exchange the notes for a variable number of the Group's ordinary shares) and redemption right (Group's ability to redeem the notes at their discretion). The Group determined that these embedded features should not be separated from its host contract and accordingly, are accounted for as part of the debt host. The fair value of the debt host, net of unamortized debt issuance costs, is accreted at an effective interest rate of 4.22% over the term of the instrument and will be accreted up to the principal amount at maturity. During the years ended June 30, 2025 and 2024, the Group amortized total debt issuance costs and debt discount of $143,000 and nil, respectively, which was recorded as interest expense in the Consolidated Statements of Operations and Comprehensive Income (Loss).About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.