JWCA advises box on its inaugural $345 million zero-coupon convertible and capped call  

January 2021 | read press release

Transaction Background

Box successfully raised $345 million (inclusive of greenshoe) in the convertible market at very attractive terms (0.00% coupon and 45.0% conversion premium).

Box took advantage of strong underlying market conditions to successfully execute their inaugural convertible bond and capped call

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

JWCA provided extensive analysis for Box on deal structuring and related items, such as:

• Convertible structuring

• Derivative overlay: call spread vs capped call, including whether to tax integrate

• Accounting and tax analysis/implications

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

• Syndicate structure and precedent data

• Advice on pricing on the day of execution

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

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

Results

Box’s convertible issuance was very well-received by investors

• The transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company

• The zero coupon represented the low end of the marketed coupon range

• The 45.0% conversion premium was 5% higher than the marketed conversion premium range of 35.0 – 40.0%

  • With this pricing outcome, Box achieved the best terms over the last 10 years by a company with a market capitalization below $5Bn

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