Moody’s Downgrades Coinbase’s Debt on Profitability Concerns

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Ratings agency Moody’s has downgraded Coinbase’s (COIN) corporate debt and also placed its debt ratings for the crypto exchange under review for further downgrade.

• Coinbase's Corporate Family Rating debt was downgraded by Moody's to Ba3 from Ba2, while its guaranteed senior unsecured notes was dropped to Ba2 from Ba1. According to Moody's, Coinbase had $2 billion in senior guaranteed notes due in 2028 and 2031; it did not indicate how much Corporate Family Rating debt it had.

• Moody’s said the downgrade reflects “Coinbase's substantially weaker revenue and cash flow generation due to the steep declines in crypto asset prices that have occurred in recent months and reduced customer trading activity.”

• Moody’s said it expects Coinbase’s profitability to remain challenged despite announcing the layoffs of around 1,100 employees on June 14.

• According to Moody's, as of March 31, 2022, Coinbase had $6.1 billion in cash and cash equivalents, which it called "a healthy position" relative to the company's $3.4 billion in long-term debt, which includes the $2 billion in senior guaranteed notes.

• Coinbase's shares were down 0.3% to $58.88 after hours on Thursday after rising 13% during the day. Shares are down almost 77% year to date.

UPDATE (June 23, 21:08 UTC): Added details of Moody's debt rating moves.

UPDATE (June 23, 21:18 UTC): Added the amount of Coinbase's senior guaranteed debt.