JWCA advises MP Materials on an exchange of a majority of its outstanding 2026 convertible into its existing 2030 convertible notes 

December 2024 | read press release

Transaction Background

Following MP Materials (“MP”) $748mm issuance of 3.00% convertible due 2030 and simultaneous repurchase of significant portion of its 0.25% convertible due 2026 in March 2024, the Company was interested in refinancing a majority of its remaining outstanding notes due 2026.

JWCA designed a novel and innovative transaction that allowed the company to exchange its convertible due 2026 into its recently issued convertible due 2030, which was trading above par to create a natural de-levering transaction

MP’s objectives included:

  • Minimize stock price risk during execution

  • Take advantage of recent stock price performance and exchange existing 2026 convertible notes trading at a discount to par into existing 2030 notes trading at a premium to par (thus de-levering)

  • Minimize issuance costs and streamline execution process

MP engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and placement of the transaction

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

  • Transaction design and documentation

  • Tax fungibility

  • Delta analysis

Results

MP was able to extend the maturity of $142.3mm (~68%) of its outstanding convertible due 2026 by 4 years through an exchange into $115.3mm of the reopened convertible due 2030

The re-opening execution was quicker and more efficient than a new convertible issuance

The Company was able to de-lever by $27mm (~20% of the 2026 notes retired)

Confidential marketing followed by an overnight execution eliminated stock price and market risk to the Company

J. Wood Capital purchased MP stock to help facilitate the transaction