MSTR.PNG

JWCA advises MicroStrategy on its upsized $1.01 billion convertible issuance (MicroStrategy’s fourth convertible issuance in 2024)

September 2024 | read press release

Transaction Background

Following three successful convertible issuances in March and June 2024 raising $2.2bn, MicroStrategy (the “Company”) tapped the convertible market for the fourth time in September 2024 to raise an additional $1,010 million at highly attractive terms (0.625% coupon and 40.0% conversion premium) 

MicroStrategy plans to use the proceeds to redeem its outstanding 6.125% senior secured 1st Lien notes due 2028, purchase bitcoin and general corporate purposes

The Company was able to take advantage of strong underlying convertible market conditions to successfully execute the new issuance with additional proceeds used to purchase bitcoin and general corporate purposes

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

  • Convertible structuring and documentation

  • Refinancing alternatives and considerations

  • Syndicate structure and precedent data

  • Advice on pricing on the day of execution

  • Analysis and design of pricing mechanism (full-day VWAP, partial-day VWAP, closing price)

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

Results

MicroStrategy’s sixth convertible financing, and fourth of 2024, was well–received by investors:

  • MicroStrategy continued its record pace for repeat convertible issuance, raising over $3 billion in 4 issuances in a 6-month time period (6% of the $51bn in total convertible capital 2024 ytd)

  • The pricing terms of a 0.625% coupon and 40.0% conversion premium represented the second-best pricing outcome in the convertible market in 2024

  • Innovative partial-day VWAP approach to setting stock reference price resulted in only -2.7% stock price impact

  • MicroStrategy’s offering attracted significant demand enabling the Company to upsize the transaction by 25%

  • MicroStrategy was able to refinance its outstanding secured and expensive senior notes with covenant-lite, unsecured, and low coupon debt

  • JWCA supported the management team by providing execution advice and ensuring a high-quality execution