JWCA advises EQT on its DEBUT $500 million convertible BOND and capped call

APRIL 2020 | read press release

Transaction Background

As part of a capital plan to de-lever and de-risk the balance sheet, EQT opportunistically raised proceeds in the convertible market to repay or redeem near term liabilities

EQT’s objectives included:

• Low cost financing and smooth the liability maturities

• Diversify funding courses and reduce reliance on the high yield market

JWCA supported EQT on deal structuring and related items, including:

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

• Tax analysis of the convertible and capped call

• Accounting for convertible and capped call

• Change of control and make-whole mechanics

• Shareholder messaging

• Syndicate structure and precedent data

JWCA designed and ran a capped call auction process to achieve competitive terms, which led to significant savings for the Company

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

Results

With JWCA’s help, EQT was in the market in under a week, after deciding to proceed with the financing

EQT’s convertible issuance was well-received by investors:

• The deal was upsized 26% to $440mm base size from $350mm at launch

• The 1.75% coupon represented the low end of the marketed coupon range

• The 20% conversion premium represented the midpoint of the marketed premium range

Capped call raised effective conversion price to 50% above the stock price at issue

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