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JWCA advises RINGCENTRAL ON ITS $460 million 0% convertible bond and CApped CALL OFFERING

FEBRUARY 2018 | read press release

Transaction Background

RingCentral hired JWCA to serve as its Financial Advisor in its convertible issuance and capped call execution due to JWCA’s depth of expertise and lack of conflicts

JWCA provided extensive analysis to aid in RingCentral decisions:

  • Capped call vs call spread
  • Provisional redemption schedule
  • Share repurchase
  • Structure optimization through fixed growth and Monte Carlo analysis
  • Accounting for convertible, capped call, and issuance costs with examples
  • Syndicate selection and fees
  • Change of control and make-whole mechanics

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

Results

RingCentral’s convertible issuance was very well-received by investors:

  • Convert priced at the company-friendly end of the marketed premium range (30.0% vs 25.0 – 30.0%)
  • Priced at the company-friendly end of the marketed coupon range (0.00% vs 0.00 – 0.50%)
  • Only the 5th Technology issuance with a zero coupon in the past 4 years
  • Company received no investor pushback for a higher coupon for a provisional call structure
  • Stock price only fell ~2.1% on execution day

Capped call negotiation and documentation produced meaningful savings for RingCentral, while mitigating future downside scenarios