JWCA advises Alnylam Pharmaceuticals on its inaugural $1,035 million convertible and capped call transaction

September 2022 | read press release

Transaction Background

Alnylam Pharmaceuticals Inc (“ALNY”) successfully raised $1,035mm in the convertible market at attractive terms (1.00% coupon and 35.0% conversion premium)

Alnylam’s objectives included:

• Lower cost of capital by pre-paying the higher interest Blackstone term loan

• Take advantage of strong convertible market conditions and stock price momentum behind positive data readouts

ALNY 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

Alnylam was extremely well received by investors

• The transaction was approximately 3.5x oversubscribed

• Priced at 1.00% coupon, which was below the initial marketed range, and a 35% conversion premium, which was high end of the marketed range

• ALNY’s stock price traded down 5.1%. This compares to a typical stock price reaction of down 5 – 10%

Repaid entire Blackstone term loan, replacing existing senior secured, floating-rate debt with an unsecured, low fixed-coupon convertible with no covenants

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