JWCA acts as EXCHANGE agent for Ionis Pharmaceuticals on ITS $549 MILLION CONVERTIBLE BOND EXCHANGE, NEW ISSUANCE and call spread

December 2019 | Read PRESS RELEASE

Transaction Background

Ionis had a $685mm convertible bond due in 2021 and was interested in exploring options for refinancing.  In particular, Ionis wanted to avoid market risk and execute as efficiently as possible

Company objectives:

• Maintain a strong cash balance

• Mitigate equity dilution

• Execute any financing as efficiently as possible, while minimizing risk and execution costs

JWCA provided extensive data and analysis for Ionis, allowing the Company to make informed decisions:

• Financing: equity, convertible, or structured debt?

• If convertible, use a call spread, capped call, or neither?

• Execution: new issuance or convertible exchange?

In addition, JWCA provided Ionis with experience and expertise, facilitating a smoother execution than would otherwise have been possible:

• Targeted investors for optimal mix of hedge and outright to drive Company-friendly terms

• Structured call spread execution to compliment investor mix, again driving Company-friendly terms

• Assisted the team with documentation, tax review, and settlement

• Provided advice, support and analysis during the execution

Results

• Company issued $549mm in a new convertible, with $376mm exchanged from existing investors and $110mm of new capital raised to drive tighter pricing

• Avoided stock price risk, as we executed as an overnight after the wall-cross

• Refinanced ~55% of the Company’s 2021 convertible notes at a lower interest rate and higher effective conversion price

  • Reduced coupon from 1.00% to 0.125%, a record low for a biotech issuer

  • Increased conversion price from $66.81 to $83.28 ($123.38 with call spread)

  • Extended maturity by ~3 years on $376mm of debt

• JWCA’s call spread auction resulted in meaningful savings for the Company