JWCA Advises microstrategy on its upsized inaugural $650 million convertible

December 2020 | read press release

Transaction Background

MicroStrategy successfully raised $650 million (inclusive of greenshoe) in the convertible market at very attractive terms (0.75% coupon and 37.5% conversion premium)

MicroStrategy took advantage of strong underlying market conditions and the recent strength in its stock price to successfully execute its first convertible bond

MicroStrategy engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of its transaction

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

• Convertible structuring

• Derivative overlay evaluation: capped call vs call spread benefits and considerations

• Accounting and tax analysis/implications

• Convertible documentation advice to ensure maximum value and future efficiency/flexibility for the company

• Syndicate structure and precedent data

• Advice on pricing on the day of execution

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

Results

Groundbreaking financing with MicroStrategy intent to invest the net proceeds from the notes in bitcoin in accordance with its Treasury Reserve policy

MicroStrategy’s convertible issuance was very well-received by investors

• The transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company’s debut offering, and which led to a 37.5% upsize in the base deal size, from $400mm to $550mm

• The 0.75% coupon represented the low end of the marketed coupon range

• The 37.5% conversion premium represented the high end of marketed premium range