JWCA advises Upwork on the repurchase of ~$197mm convertible notes for cash at meaningful discount to par

MARCH 2023 | read press release

Transaction Background

In March 2023, JWCA advised Upwork (the “Company”) on the cash repurchase of ~$197mm of its outstanding 2026 convertible. Upwork wanted to opportunistically repurchase their notes at a significant discount to par to opportunistically manage their outstanding liabilities and capital structure.

Upwork’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

  • Provided analysis and advice on whether to unwind their existing capped call

  • 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 repurchased ~$197mm face value of their convertible notes (~34% of outstanding) for cash at a meaningful discount to par

  • Saved an additional ~$1.7mm of cash interest over the remaining convertible life