JWCA advises Ionis Pharmaceuticals on its $500mm convertible bond offering
November 2014 | read press release
Transaction Background
J. Wood Capital Advisors was hired by Ionis Pharmaceuticals to evaluate its capital structure, then execute a new convertible issuance in a smarter, more efficient manner.
- JWCA provided complete capital structure analysis related to:
- Recommended size of new convertible debt
- Impact on interest expense and net dilution
- Net stock trading impact from the hedge funds from the transaction
- Optimal timing considerations
- JWCA designed the strategy and execution process to meet the company's objectives:
- No material change to Company's total cash interest expense (even though debt amount was increased substantially)
- Lowered the underlying shares
- Raised the conversion premium materially
- Extended the maturity of the convertible profile by 2+ years
- JWCA assisted the team with documentation, accounting and tax review with a focus on ensuring more company-friendly provisions.
- JWCA provided advice, support and analysis during the execution
“Jason & Katy spent over a year working with us to develop a plan for our capital structure. Then they led the execution of our debt financing flawlessly. They became a key part of our internal team, and always had our interests and objectives in mind.”
Results
- The company executed a successful liability management exercise:
- Lowered the coupon from 2.75% to 1.00%
- Raised the conversion price from $16.63 to $66.81
- Reduced potential dilution by over 1.5mm shares
- Pushed out maturity ~2+ years
- The company repurchased 70% of their existing 2.75% convertible due 2019
- The company's stock rose +8.8% on the day of execution