JWCA advises Sarepta Therapeutics on its $1.15 billion convertible and capped call transaction

September 2022 | read press release

Transaction Background

Sarepta Therapeutics Inc (“SRPT”) successfully raised $1.15bn in the convertible market at attractive terms (1.25% coupon and 35.0% conversion premium)

Sarepta’s objectives included:

  • Lower cost of capital and optimize the balance sheet by repaying higher cost BioPharma debt and repurchasing a portion of the outstanding 2024 Notes

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

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

  • Re-financing analysis

  • Convertible and derivative overlay structuring

  • Syndicate structure and precedent data

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

  • Shareholder messaging

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

JWCA provided advice, support and analysis throughout the execution process

Results

Sarepta was well received by investors

  • 1.25% coupon priced at the low end of the marketed range and 35% conversion premium at the mid-point of the marketed range

  • Sarepta was able to simultaneously retire $150.6 million of the 2024 Convertible Notes at a modest premium to market price

Repay $550mm, 8.5% BioPharma term loan, resulting in annual coupon saving of ~$40mm

Capped call documentation and auction process produced meaningful savings for Sarepta, while maximizing flexibility