JWCA advises Lumentum on its $1.265 billion convertible and capped call transaction to repurchase a portion of its outstanding convertible notes

September 2025 | read press release

Transaction Background

Lumentum Holdings Inc. (“Lumentum” or the “Company”) successfully raised $1.265 billion (inclusive of greenshoe) in the convertible market at highly attractive terms (0.375% coupon and 40.0% conversion premium), while repurchasing ~$581mm (~55%) of its outstanding 2026 convertible notes

The Company opportunistically raised capital at a very low cost after achieving an all-time high stock price high on the Nasdaq the week prior to execution

Lumentum’s objectives included:

  • Opportunistically repurchase 2026 convertible notes ahead of maturity to manage outstanding liabilities and capital structure

  • Raise cash to the Balance Sheet

  • Protect against future equity dilution through a derivative overlay

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

  • Refinancing roadmap, tactics and analysis

  • Convertible and derivative overlay structuring and tax implications

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

  • Execution timing and shareholder messaging

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

JWCA provided advice, support and analysis throughout the execution process

Results

Lumentum’s convertible transaction was very well received by investors:

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

  • The 0.375% coupon was below the low end of the marketed coupon range

  • The 40.0% conversion premium represented the high end of the marketed premium range

The Company simultaneously repurchased ~$581mm of its 2026 convertible notes (~55% of outstanding) at a minimal premium to the current bond trading price

Capped call documentation and auction process produced meaningful savings for Lumentum, driving economics in the Company's favor