JWCA advises Kosmos Energy on its inaugural and upsized $400 million convertible and capped call

March 2024 | read press release

Transaction Background

Kosmos Energy successfully raised $400mm (including greenshoe) in the convertible market at attractive terms (3.125% coupon and 30.0% conversion premium). 

Kosmos Energy’s objectives included:

• Opportunistically raise capital at low cost with limited covenants

• Repay a portion of outstanding indebtedness under commercial debt facility

• Protect against future equity dilution through a derivative overlay

• Diversify investor base and access to capital 

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

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

• Convertible structuring

• Analysis of benefits / considerations of a capped call

• Syndicate structure and precedent data

• Accounting and tax analysis / implications

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

• Investor composition considerations

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

JWCA provided advice, support and analysis throughout the execution process

Results

Kosmos Energy’s offering was well received by investors, attracting significant demand and institutional interest:

• The transaction was multiple times oversubscribed on a trading day with ~$4.0bn in primary convertible issuance

• 3.125% coupon and 30.0% conversion premium priced at the midpoint of marketed range

• JWCA supported the management team on the entirety of the offering providing execution advice and ensuring a high-quality execution

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