JWCA advises Affirm Holdings on the repurchase of ~$229mm convertible notes for cash at meaningful discount to par

february 2023 | read press release

Transaction Background

In February 2023, JWCA advised Affirm (“AFRM” or the “Company”) on the cash repurchase of ~$229mm of its outstanding 2026 convertible. Affirm wanted to opportunistically repurchase their notes at a discount to par to opportunistically manage their outstanding liabilities and capital structure.

Affirm’s objectives included:

• De-lever: retire a portion of the convertible to reduce debt outstanding

• Capture a sizeable yield-to-maturity by purchasing the notes at a meaningful discount to par

• Save a significant amount of cash at maturity by retiring existing convertible below par today

• Minimize transaction and friction costs: execute as efficiently as possible with a focus on minimizing execution costs

JWCA acted as Repurchase Agent for the transaction:

• Provided analysis and advice around tactics related to investor targeting and engagement

• Led the investor outreach, negotiation, and execution of repurchases

Results

The Company executed a successful liability management transaction for its 0% coupon  convertible notes due 2026:

• The Company paid an aggregate amount of ~$158mm in cash for the repurchase of ~$229mm of their convertible notes, which reflected a meaningful discount to par

• About $1.5 billion in aggregate principal amount of 2026 Notes remain outstanding