JWCA advises Ironwood on its $400 million convertible bond issuance and capped call purchase to refinance its existing debt

August 2019 | read press release

Transaction Background

J. Wood Capital Advisors was hired by Ironwood Pharmaceuticals to help advise on the restructuring of its capital structure given the recent spin-off of its Cyclerion business.

JWCA provided extensive analysis and evaluation of important offering decisions, including:

• Pro-forma maturity profiles and financing costs

• Call spread vs Capped call

• Accounting and tax considerations

JWCA also designed and ran a capped call auction process to achieve competitive terms

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

Results

The Company executed a successful liability management exercise:

• Strong investor demand led to an upsized offering of $350mm versus a base deal size of $330mm

• Redeemed expensive 8.375% debt in its entirety

• Put in place staggered maturities of new convertible debt, both with meaningfully lower coupon costs than the existing convertible refinanced

Capped call documentation and auction process produced meaningful savings for Ironwood, while protecting the company in early unwind scenarios