JWCA advises Core Scientific on its upsized $460 million convertible issuance

August 2024 | read press release

Transaction Background

Core Scientific (“CORZ” or the “Company”) successfully raised an upsized $460mm (inclusive of $60mm greenshoe) in the convertible market at attractive terms (3.00% coupon and 30.0% conversion premium)

Following Core Scientific’s successful mandatory conversion of its $260mm 12% Secured Convertible Notes and strong stock price performance in 2024 (~3x growth), the Company sought to continue strengthening its balance sheet

Core Scientific’s objectives for the convertible financing transaction included:

• Refinance outstanding loans under its credit and guaranty agreement and redeem outstanding $150mm 12.5% senior secured notes due 2028

• Minimize stock price risk during execution

JWCA provided extensive analysis for CORZ on deal structuring and related items, such as:

• Convertible structuring

• Execution strategy and timing

• Syndicate structure and precedent data

• Investor composition considerations

• Shareholder messaging

JWCA provided advice, support and analysis throughout the negotiation and execution process

The transaction was conducted using a confidential marketing process before launching into a traditional one-day public marketing period

Results

Core Scientific’s convertible financing transaction was very well received by investors:

• The transaction was multiple times oversubscribed, leading to the issue being upsized by ~14%

  • Represents only the 3rd marketed technology convertible of 2024 with both criteria:

    • Priced at the company-friendly end of coupon and conversion premium

    • Upsized deal size

• The one-day confidential wall-cross allowed the Company to build a strong order book of long-only investors, sending a strong signal going into public launch

Core Scientific was able to obtain unsecured, covenant free debt at attractive terms