JWCA advises HeartWare International on a convertible exchange and new issuance

MAY 2015 | read press release

Transaction Background

JWCA was hired by HeartWare International to evaluate its capital structure.  The recommendation was to push out the maturity of its existing debt by exchanging a portion of the 3.50% Convertible Notes due 2017 into 1.75% Convertible Notes due 2021.  In the exchange, JWCA:

• Assisted the HeartWare team with comparative analytics of an exchange vs a publically-marketed new issuance

• Designed the exchange strategy in order to mitigate impact on the company’s stock price

• Assisted the team with documentation, accounting, and tax review

• Led the negotiation with investors

Results

Exchanged approximately 50% of its 3.50% Convertible Notes due 2017

• Pushed refinancing risk out to 2021

• Cut its coupon in half, from 3.50% to 1.75%

• Maintained the same conversion price of $100.00 (+30.5% premium) of old bonds

• Obtained the flexibility to redeem the new notes in 4 years if HTWR stock were to increase significantly

Raised an additional ~$65mm in capital to opportunistically add cash to balance sheet and prefund remaining 2017 maturities and operations

Confidential, efficient execution with no market exposure:

• Positive stock price performance: HTWR share price rose +2% during the execution period, vs. average decline of ~10% for similar sized deals

• Minimal company marketing, so management could focus on running the business