JWCA advises XERO on its GROUNDBREAKING $300 million DEBUT convertible bond AND CALL SPREAD

SEPTEMBER 2018 | read press release

Transaction Background

Following a 78% stock price rise in 2018, Xero executed a convertible issuance (with call spread) to repay existing debt and fund potential strategic investments and acquisitions.  No other Australia or New Zealand company not listed in the US had ever executed this type of transaction, so Xero selected JWCA as its financial advisor in its convertible offering and call spread purchase due to the depth of experience of JWCA’s team.

JWCA provided detailed analysis for Xero and assisted with:

• Convertible and call spread pricing considerations in light of US convertible and international equity markets

• Convertible and call spread structuring to align with Company’s objectives

• Investor targeting and messaging

JWCA also negotiated on Xero’s behalf to achieve Company-friendly terms on the convertible bond and call spread

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

Results

Xero executed a successful capital raise

• Raised US$300mm of capital in a wall-cross and overnight execution

Call spread process produced meaningful savings for Xero

It is expected that the Upper Strike Call Option will be equity classified under IFRS, which would be a market first