JWCA advises NEW RELIC on its $500 million DEBUT convertible bond AND CAPPED CALL

mAY 2018 | read press release

Transaction Background

New Relic experienced strong revenue growth and stock price appreciation over the past year, and was interested in raising capital to finance its growth. New Relic selected JWCA as its financial advisor on the transaction to provide market knowledge, comprehensive execution support, and unbiased advice.

JWCA provided extensive analytics and support to aid in key decisions:

• Structuring:
  • Call spread vs capped call
  • Redemption feature vs bullet maturity
• Change of control and make-whole mechanics
• Tax integration of capped call
• Accounting treatment of convertible and capped call
• Syndicate economics and fees
• Contract negotiations

JWCA provided advice, support and analysis throughout the negotiation and execution process

Results

New Relic’s convertible issuance was well-received by investors:

• Stock price fell only ~1.7% on a challenging day in the market, where the S&P fell by ~1% and the 5 year treasury yield reached its highest level in nearly a decade

Capped call documentation and negotiation process produced meaningful savings for New Relic, while mitigating future downside scenarios