JWCA advises INphi on an exchange of their notes into cash and common equity

May 2020 | read press release

Transaction Background

Inphi was interested in retiring a portion of its upcoming convertible maturities in $130.5mm in December 2020 (6 months) and $287.5mm in September 2021 (1.3 years)

Inphi's objectives were:

• Minimize potential future share dilution from its near-term convertibles

• Exchange into approximately par in cash and the remaining value in common stock

• Minimize transaction and friction costs; execute as efficiently as possible

JWCA acted as exchange agent for the exchanges and provided analysis and advice around:

• Tactics around investor targeting and negotiation

• Balancing repurchase considerations to minimize friction costs

• Outreach and execution of exchanges with existing convertible investors

• Analysis and tactic regarding whether to leave the existing capped call overlays in place or unwind early

• Accounting and tax analysis around the extinguishment of the existing convertible notes for cash and stock and amending the existing capped call agreements

Results

The Company executed a successful liability management transaction for its 1.125% convertible notes due 2020 and 0.75% convertible notes due 2021:

• Exchanged ~$81.0mm of their 1.125% convertible notes due 2020 and ~$223.1mm of their 0.75% convertible notes due 2021 for a mix of common equity and cash

Retired $304.0 million principal amount of debt

• Saved an estimated ~$2.6 million of cash interest over the remaining life

• Bonds retired at a modest premium to their pre-exchange trading prices