JWCA advises Burlington Stores on an exchange of its convertible notes into common equity and cash
August 2021 | read press release
Transaction Background
Following the issuance of Burlington Stores’ $805mm convertible in April 2020, BURL’s stock price increased ~80%. 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 Burlington to quickly and efficiently de-lever the balance sheet
Burlington’s objectives included:
De-lever: retire the convertible to lower debt balance and interest expense
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
Results
The Company executed a successful liability management transaction for its 2.25% convertible notes due 2025:
Exchanged $160.4mm of their convertible notes (19.9% of outstanding) for a mix of common equity and cash
Saved an estimated ~$13.1mm of cash interest over the remaining life
Minimal stock selling: nearly all of the shares delivered to investors were simply returned to the share lenders
No market risk for the Company – the transaction was conducted confidentially and executed based on the closing stock price