JWCA advises Omeros Corporation on its upsized $225 million convertible and capped call

August 2020 | read press release

Transaction Background

Omeros Corporation (“OMER”) executed a dual-tranche offering of $100mm common equity and $210mm convertible debt to raise capital and strengthen its balance sheet to fund further development and future commercialization of narsoplimab while also refinancing a portion of its outstanding 2023 convertible​

OMER’s objectives:

• Take advantage of a strong convertible market and positive market response to narsoplimab data for treatment of ARDS related to COVID-19​

• Add meaningful capital to the balance sheet while minimizing dilution​

• Extend maturity of a portion of existing convert while preserving some de-levering flexibility from call feature in existing convertible​

• Mitigate dilution on new convertible with a new capped call

JWCA advised Omeros on deal structuring and related items, including

• Transaction structuring​

• Accounting considerations​

• Documentation​

• Syndicate economics

JWCA also designed and ran a capped call auction process to achieve competitive terms and diversify counterparty risk​

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

Results

Omeros’s convertible issuance successfully priced:

• Offering was upsized from initial launch size of $200mm and greenshoe partially exercised for total size of ~$225mm​

• Company was able to execute the conversion premium at the high-end of the marketed range and the coupon at the midpoint of the marketed range​

• Achieved a concurrent repurchase of ~55% of existing bonds

Capped call documentation and auction process produced meaningful savings for Omeros at a high upper strike percentage