JWCA Advises microstrategy on its upsized $1,050 million zero-coupon convertible issuance

February 2021 | read press release

Transaction Background

Following MicroStrategy’s successful inaugural convertible issuance in December 2020, the Company issued a second convertible offering with use of proceeds to purchase additional bitcoin

2 months after its debut convertible, MicroStrategy’s stock price had increased 230%, with bitcoin’s price up ~160%

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

• Convertible structuring

• 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

MicroStrategy’s second financing achieved impressive terms across all metrics:

• The transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company’s second offering, and which led to a 50% upsize in the base deal size, from $600mm to $900mm (compared to 37.5% upsize in December 2020)

• The 0.00% coupon represented the low end of the marketed coupon range (and compared to 0.75% coupon in December 2020)

• The 50% conversion premium represented the high end of marketed premium range (and compared to 37.5% in December 2020)

• MicroStrategy’s second convertible is one of less then 10 convertible debt offerings to achieve 0% up 50% or better convertible terms in the past year and only the second 6 year transaction to achieve 0% up 50%