JWCA advises Bloomin’ Brands on an exchange of its convertible notes into common equity and cash

May 2022 | read press release

Transaction Background

Following the issuance of Bloomin’ Brands’ $230mm convertible in May 2020, BLMN’s stock price nearly doubled. The high stock price presented an opportunity to retire a portion of the 2025 debt early by delivering a mix of stock and cash, which allowed Bloomin’ to quickly and efficiently de-lever the balance sheet and mitigate dilution

Bloomin’s objectives included:

  • De-lever: retire the convertible to lower debt balance

  • Minimize transaction and friction costs; execute as efficiently as possible

JWCA acted as Exchange Agent for the transaction and provided analysis and advice around:

  • Tactics around investor targeting and execution method

  • Balancing exchange considerations to minimize repurchase price and friction costs

  • Investor outreach, negotiation, and execution of exchanges

  • Accounting and tax analysis around the extinguishment of the existing convertible notes for cash and stock

  • Managed call spread unwind negotiation process

Results

The Company executed a successful liability management transaction for its 5.00% convertible notes due 2025:

  • Exchanged $125.0mm of their convertible notes (54.3% of outstanding) for a mix of common equity and cash

  • Minimal transaction cost: the value delivered to investors was only marginally more than what the company already owed (underlying shares + remaining coupons)

  • Call spread unwind negotiations produced meaningful savings for the Company