JWCA acts as sole placement agent for Burlington Stores on its $297 million convertible exchange and concurrent share repurchase

September 2023 | read press release

Transaction Background

Burlington Stores (the “Company”) was interested in refinancing the maturity of its outstanding 2025 convertible, which was trading slightly above par.

After previously engaging JWCA to execute several opportunistic cash repurchases over a 2-year span, Burlington wanted to advantageously address a majority of the remaining outstanding 2025 convert prior to it going current on its balance sheet

Burlington’s objectives for the September 2023 exchange transaction included:

  • Achieve a ~2.75-year maturity extension to 2027 for $241mm (61%) of its outstanding $397mm convertible notes due 2025 while lowering its cash coupon

  • Execute overnight without the stock price impact from a new 144A marketed convertible

  • Execute a small share buyback to help with the issuance and offset potential future dilution

JWCA acted as sole placement agent for the exchange and new issuance, providing the following support for the Company:

  • Advised on financing tactics and investor targeting to drive Company-friendly terms

  • Led the outreach and execution of placement and exchange with convertible investors

  • Structured a concurrent share repurchase to help mitigate dilution and stock impact

  • Assisted the company with economic analysis of alternatives, accounting and tax analysis

Results

Burlington issued $297mm in a new convertible due 2027 at highly attractive terms (1.25% coupon and 32.5% conversion premium) overnight in a private placement with existing and new investors

  • The convertible’s coupon and premium priced at the issuer friendly end of pricing ranges

The Company was able to retire $241mm (61%) of its outstanding 2025 convertible notes and issue an incremental ~$42mm of new convertible notes

Avoided stock price risk, as the exchange was executed overnight after a confidential marketing process with existing and new convertible investors

Concurrently, Burlington was also able to retire $26mm of stock overnight with no premium