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