JWCA advises Microchip Technology on its $1.485 billion mandatory convertible preferred + capped call

March 2025 | read press release

Transaction Background

Microchip Technology Incorporated (“Microchip” or the “Company”) successfully raised $1.485 billion (inclusive of greenshoe) in the equity linked market at attractive terms

Microchip’s objectives included:

• Raise equity to further bolster ratings while also retaining upside in stock through mandatory preferred structure

• Repay existing debt

• Protect against future equity dilution through a derivative overlay

JWCA provided extensive analysis on deal structuring and related items, including:

• Mandatory and derivative overlay structuring

• Syndicate structure and precedent data

• Mandatory convertible and capped call documentation to ensure maximum value and future efficiency/flexibility for the company

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

JWCA provided advice, support and analysis throughout the execution process

Results

Microchip’s mandatory convertible transaction was very well received by investors:

• The Company was able to attract significant demand leading to a multiple times oversubscribed book

• The convertible maximized issuer-favorable results; with the dividend pricing through the originally marketed terms and the threshold appreciation premium pricing on the company friendly end of range

• The transaction had substantial demand from strong fundamental investors

• JWCA supported the management team on the entirety of the offering providing execution advice and ensuring a high-quality execution

Capped call documentation and auction process produced meaningful savings for Microchip, while maximizing flexibility for the Company

This is JWCA’s fifth advisory assignment for the Company after advising Microchip on capital structure transactions in February 2015, February 2017, June 2017 and May 2024