JWCA advises Chegg on the repurchase of ~$117mm convertible notes for cash at significant discount to par
November 2024 | read press release
In November 2024, Chegg (the “Company”) opportunistically repurchased an additional portion of its outstanding 0% convertible notes due 2026 at a 17.5% discount to par to manage their liabilities and capital structure
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
JWCA acted as Repurchase Agent for the transaction and 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
Results
The Company executed a successful liability management transaction for its zero-coupon convertible notes due 2026:
Repurchased ~$117mm face amount of its 0% convertible senior notes due 2026 in exchange for ~$96mm in cash (17.5% discount to par, generated >$20mm of net cash and >11% YTM)
Retired ~$117mm of ~$603mm total outstanding debt (~19%) at a meaningful discount to par
Successfully managed their 2026 convertible note liability
This is JWCA’s tenth 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 five convertible repurchase transactions in 2020, 2021, 2022 and 2023