JWCA advises Opendoor on the repurchase of ~$189mm convertible notes for cash at meaningful discount to par

March 2023 | read press release

Transaction Background

In March 2023, JWCA advised Opendoor (“OPEN” or the “Company”) on the cash repurchase of ~$189mm of its outstanding 2026 convertible. Opendoor wanted to opportunistically repurchase their notes at a significant discount to par to opportunistically manage their outstanding liabilities and capital structure.

OPEN’s objectives included:

  • De-lever: retire a portion of the convertible to reduce debt balance and interest expense

  • Capture a sizeable yield-to-maturity by purchasing the notes at a meaningful discount to par, while also saving a significant amount of cash at maturity

  • Minimize transaction and friction costs: execute as efficiently as possible with a focus on minimizing execution costs

JWCA acted as Repurchase Agent for the transaction:

  • Provided analysis and advice around tactics related to investor targeting and engagement

  • Led the investor outreach, negotiation, and execution of repurchases

  • Assisted the company with economic analysis of convertible economics, accounting and tax

Results

The Company executed a successful liability management transaction for its 0.25% coupon convertible notes due 2026:

  • The Company paid an aggregate amount of ~$99mm in cash for the repurchase of ~$189mm of their convertible notes, which reflected a meaningful discount to par

  • Saved an additional ~$1.6mm of cash interest over the remaining convertible life