JWCA advises Blackline on its inaugural $500 million convertible bond issuance and capped call purchase

August 2019 | read press release

Transaction Background

On the heels of a strong second quarter, the Company wanted to take advantage of its stock price momentum to raise capital in order to finance its continued growth and market share expansion. Blackline selected JWCA to advise on its execution in light of its experience, depth of capabilities, and lack of conflicts.

JWCA provided extensive analytics and support to aid in key decisions:

• Purchase of call spread vs capped call

• Redemption structure

• Change of control and make-whole mechanics

• Benefits and considerations of capped call tax integration

• Provisions of capped call contract forms

• Syndicate selection

• Shareholder messaging

JWCA also 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

Blackline convertible issuance was very well-received by investors:

• Strong investor demand led to very attractive convertible pricing

  • Priced with a 0.125% coupon, near the low end of the 0.00 – 0.50% range, and the lowest coupon this year

  • Priced with a 37.5% conversion premium, at the high end of the 32.5 – 37.5% range

• Stock price fell only ~2.5% on execution day

Capped call documentation and auction process produced meaningful savings for Blackline, while mitigating future downside scenarios