According to the company’s announcement, the credit facility will be used to safeguard customer assets in light of current market volatility and only “if needed.”
The market volatility threatening Voyager originated from Three Arrows Capital, an investment fund that took out a $350 million USDC and 15,250 BTC loan from the company and has so far failed to repay it.
Voyager is struggling to stay afloat even with Alameda’s loan
Voyager’s operating subsidiary, Voyager Digital, said that it may issue a notice of default to Three Arrows Capital (3AC) for failure to repay its loan of 15,250 BTC and $350 million USDC. The company initially made a request for a repayment of $25 million USDC by June 24th. However, market volatility and liquidity issues within the platform pushed Voyager to request a repayment of 3AC’s entire balance of USDC and BTC by June 27th.
According to the company’s announcement, neither of these amounts have so far been repaid and failure to repay either request amount by June 27th will be considered a default. Voyager said that it intends to pursue recovery from 3AC and is currently discussing the course of legal action it will take. However, the company said that it was unable to assess the amount of funds it will be able to recover from 3AC.
It’s unclear whether Alameda’s loan will enable Voyager to stay afloat. The company’s exposure to 3AC is over $150 million higher than the credit it secured from Alameda.
As of June 20th, Voyager held approximately $152 million in cash and crypto assets, as well as around $20 million in cash restricted for the purchase of USDC. Alameda’s loan, worth around $500 million in total, brings the company’s total liquidity to $652 million.
The terms of the loan dictate that no more than $75 million may be drawn over any rolling 30-day period and that the corporate debt must be limited to approximately 25% of customer assets on the platform. Voyager is also required to secure additional sources of funding within the next 12 months.
Providing the loan has granted Alameda indirect access to approximately 11.56% of Voyager’s outstanding shares.