JWCA advises RingCentral on its upsized $650 million zero coupon convertible bond and capped call, and repurchase

september 2020 | read press release

Transaction Background

RingCentral Inc. successfully raised $650mm in the convertible market at extremely attractive terms (0.00% coupon and 52.5% conversion premium)

RingCentral engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of its transaction

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

• Convertible structuring: redemption options and implications on overall economics

• Derivative overlay: maturity analysis

• Accounting and tax analysis/implications

• Convertible and capped call documentation to ensure maximum value and future efficiency/flexibility for the company 

• Syndicate structure and precedent data

• Convertible repurchase analysis and considerations

• Advice on timing and when to go to market

JWCA designed and ran a capped call auction process to achieve competitive terms

JWCA led the negotiation to unwind the existing capped call at Company-favorable terms

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

Results

RingCentral’s convertible issuance was very well-received by investors, achieving very attractive terms of 0.00% coupon, and a 52.5% conversion premium   

• Due to strong investor demand, the deal was upsized nearly 10% from original $600mm launch size

RingCentral repurchased $133mm (over 50% of remaining notional) of its existing 0.00% convertible notes due 2023 simultaneously with the offering at attractive pricing, with no repurchase premium 

RingCentral achieved the best convertible terms for a convertible with longer than 5 year maturity and recorded their third zero coupon convertible (most ever accomplished)

Capped call documentation and auction process produced meaningful savings for RingCentral, while maximizing flexibility for the Company