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JWCA advises BANDWIDTH on its UPSIZED $400 million convertible AND CAPPED CALL

FEBRUARY 2020 | read press release

Transaction Background

Bandwidth successfully raised $350mm in the convertible market (upsized by 17% from $300mm launch size) at very attractive terms (0.25% coupon and 32.5% conversion premium)

The company took advantage of strong momentum in its stock price leading into and following the announcement of its full year 2019 financial results

Despite a challenging macro environment on the day of issuance, Bandwidth was able to successfully raise an $350mm in low-cost capital

Bandwidth engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of its transaction

JWCA was instrumental in executing the convertible and capped call, providing the Company advice on a number of items:

  • Bank relationship management and syndicate structure

  • Accounting for convertible and capped call

  • Tax integration

  • Convertible and capped call documentation to ensure maximum value and future efficiency/flexibility for the company

JWCA designed and ran a capped call auction process to achieve competitive terms

JWCA provided advice, support, and analysis throughout the negotiation and execution process

Results

Bandwidth’s convertible issuance was well-received by investors:

  • Due to strong demand from investors, base deal size was upsized from $300mm to $350mm

  • 0.25% coupon priced at the low end of the marketed coupon range

  • 32.5% conversion premium priced at the midpoint of the marketed premium range

Capped call raised effective conversion price to 100% above the stock price at issue and a very attractive cost

JWCA was with the management team on the entire day of the offering providing execution advice and ensuring a high-quality execution

Capped call documentation and auction process produced meaningful savings for Bandwidth, while maximizing flexibility for the company and mitigating future unwind scenarios