JWCA acts as exchange agent for accuray on its $85 million convertible bond exchange

july 2017 | read press release

Transaction Background

J. Wood Capital Advisors was hired by Accuray to explore financing options and create a capital structure roadmap

Objectives:

• Minimize / remove restrictive covenants of its existing debt facility in order to create capital structure flexibility

• Minimize financing costs and limit equity dilution

• Liability management

As a first step, JWCA advised Accuray on its refinancing of its senior secured credit line with MidCap Financial in June 2017, which afforded Accuray the flexibility to refinance its upcoming maturity of convertible debt

JWCA then partnered with Accuray to carefully construct and run the convertible exchange process:

• Designed the private wall-cross and exchange strategy to avoid stock price risk, optimize balance of hedged and outright investors, and achieve attractive terms

• Assisted the team with documentation, accounting, tax review, and settlement

• Provided advice, support and analysis during the execution

Results

The Company successfully extended maturity on ~$75mm of convertible debt:

• Repurchased $75mm of existing 3.50% convertibles due 2018, thereby pushing out maturity on a sizable portion of their liability by 4+ years

• Focused the convertible exchange on the share- settled tranche of convertibles due 2018, thereby mitigating potential dilution

Mitigated stock price selling pressure from transaction through careful investor targeting