JWCA advises Nutanix on its $863 million convertible issuance and expected $500 million inaugural revolving credit facility

december 2024 | Read PRESS RELEASE

Transaction Background

Nutanix, Inc. (“Nutanix” or the “Company”) successfully raised ~$863mm (inclusive of greenshoe) in the convertible market at very attractive terms (0.50% coupon and 32.5% conversion premium) and expects to enter into a $500mm new revolving credit facility

Nutanix took advantage of strong underlying convertible market conditions to successfully execute the new convertible issuance

Nutanix’s objectives included:

  • Protect against future equity dilution and minimize stock price risk during execution through share and convertible repurchases concurrent with the convertible offering

  • Leverage convertible issuance and relationship-building event to simultaneously, efficiently and opportunistically pursue a new revolving credit facility to create $500mm of incremental liquidity and diversify liquidity sources

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

  • Analysis of benefits / considerations of dilution mitigation alternatives, including share repurchase and derivative overlay

  • Capital structure and liquidity considerations and liability management of existing notes

  • Convertible documentation to ensure maximum value and future efficiency/flexibility

  • Revolver syndication process design in conjunction with convertible execution, aiming to syndicate the new revolver by the time the convertible launched

  • Accounting analysis/implications

  • Execution timing

  • Shareholder messaging

JWCA provided advice, support and analysis throughout the execution process

Results

Nutanix’s convertible transaction was very well received by investors:

  • The transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company’s convertible bond offering

  • The 0.50% coupon and 32.5% conversion premium represented the company-friendly ends of both the marketed coupon and conversion premium ranges

Nutanix simultaneously repurchased ~3.1mm shares & $75mm of its 2027 convertible notes (~13% of outstanding) at a minimal premium to the current bond trading price

Nutanix’s stock traded largely flat on the day of the offering

This is JWCA’s second advisory assignment for the Company after advising Nutanix on its private convertible exchange in September 2021