JWCA advises Guardant HEALTH on its inaugural $1.15 Billion convertible and capped call  

NOVEMBER 2020 | read press release

Transaction Background

Guardant Health Inc. successfully raised $1.15bn in the convertible market at attractive terms (0.00% coupon and 34.0% conversion premium)

Guardant took advantage of strong underlying market conditions and the recent strength in its stock price to successfully execute its first convertible bond and capped call

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

JWCA provided extensive analysis for Guardant on deal structuring and related items, including:

• Convertible structuring

• Derivative overlay: call spread vs capped call

• Accounting and tax analysis/implications

• Convertible and capped call documentation 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

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

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

• The zero coupon represented the low end of the marketed coupon range and was the first zero coupon for a 7-year convertible since 2003, and only the second zero-coupon convert amongst all diagnostic issuers

• The 34.0% conversion premium was higher than the marketed conversion premium range of 27.5% - 32.5%

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