JWCA advises Cardlytics on its inaugural $230 million convertible and capped call  

september 2020 | read press release

Transaction Background

Cardlytics Inc. successfully raised $230mm (inclusive of greenshoe) in the convertible market at attractive terms (1.00% coupon and 32.5% conversion premium)

Notwithstanding the continued elevated market volatility and a challenging market backdrop, Cardlytics took advantage of strong investor interest to successfully execute its first convertible bond and capped call issuance

Cardlytics engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of its transaction

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

• Convertible structuring: redemption options and implications on overall economics

• Derivative overlay: call spread vs capped call

• Accounting and tax analysis/implications

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

• Syndicate structure and precedent data

• Advice on pricing on the day of execution

JWCA 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

Cardlytics’ convertible issuance was very well-received by investors   

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

• The 1.00% coupon represented the midpoint of the marketed coupon range

• The 32.5% conversion premium represented the high-end of the marketed conversion premium range 

Capped call documentation and auction process produced meaningful savings for Cardlytics, while maximizing flexibility for the Company