JWCA advises BlackLine on its upsized $675 million convertible and capped call transaction to refinance its outstanding convertible notes

May 2024 | read press release

Transaction Background

BlackLine Inc. (“BlackLine” or the “Company”) successfully raised $675mm (inclusive of greenshoe) in the convertible market at attractive terms (1.00% coupon and 30.0% conversion premium), while repurchasing ~$920mm (~80%) of its outstanding 2026 convertible notes

BlackLine’s objectives included:

• Mitigate future dilution while also minimizing cost

• Opportunistically repurchase 2026 convertible notes at a modest discount to manage outstanding liabilities and capital structure

• Minimize stock price risk during execution

JWCA provided extensive analysis on deal structuring and related items, including:

• Re-financing tactics and analysis

• Convertible and derivative overlay structuring

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

• Accounting analysis/implications

• Syndicate structure and precedent data

• Execution timing

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

JWCA provided advice, support and analysis throughout the execution process

Results

BlackLine’s convertible transaction was very well received by investors:

• The transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company’s convertible bond offering

• The 1.00% coupon was on the low end of the marketed coupon range

• The 30.0% conversion premium represented the midpoint of the marketed premium range

Capped call documentation and auction process produced meaningful savings for BlackLine, driving economics in the Company's favor

The Company obtained favorable terms on a trading day where ~$1.0bn in convertible supply was available in the primary market