JWCA advises Chegg on the repurchase of ~$65mm convertible notes for cash at a meaningful discount to par
March 2025 | read press release
In March 2025, JWCA advised Chegg (the “Company”) on the cash repurchase of an additional ~$65mm of its outstanding 2026 convertible notes at a significant discount to par, following its ~$117mm convertible repurchase in November 2024
Chegg’s objectives included:
De-lever: retire a portion of the convertible to reduce the Company’s total debt balance
Minimize transaction and friction costs; execute as efficiently as possible
Capture a sizeable yield-to-maturity by purchasing the notes at a meaningful discount, while also saving a significant amount of cash at maturity
In its role as Repurchase Agent for the transaction, JWCA provided the following support for the Company:
Provided analysis and advice around tactics related to investor targeting and engagement
Led the investor outreach, negotiation, and execution of repurchases
Assisted the Company with the analysis of convertible economics and pricing dynamics
Results
Chegg executed a successful liability management transaction for its zero-coupon convertible notes due 2026:
Repurchased ~$65mm face amount of its 0% convertible notes due 2026 in exchange for ~$57mm in cash (12.0% discount to par, generated nearly $8mm of net cash and ~9% YTM)
Chegg has now retired ~94% of the original $1bn convertible issuance in combination with previous convertible repurchase transactions
This is JWCA’s eleventh advisory assignment for Chegg. JWCA previously advised Chegg on its convertible issuance in 2020, three accelerated share repurchases in 2022 and 2023, and acted as Repurchase Agent on six convertible repurchase transactions in 2020 - 2024