JWCA advises OAK STREET HEALTH ON ITS INAUGURAL $920 million convertible and capped call

March 2021 | read press release

Transaction Background

Oak Street Health Inc. (“Oak Street” or the “Company”) successfully raised $920mm (inclusive of greenshoe) in the convertible market at attractive terms (0.00% coupon and 42.5% conversion premium)

Oak Street took advantage of strong underlying market conditions and the recent strength in its stock price to successfully execute its first convertible bond and capped call

Oak Street engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of its transaction

JWCA provided extensive analysis for Oak Street on deal structuring and related items, such as:

• Convertible and derivative overlay structuring

• Accounting implications, including the impact of early adoption of new accounting rules

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

• Syndicate structure and precedent data

• Shareholder messaging

• Advice on pricing on the day of execution

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

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

Results

Oak Street’s convertible issuance was very well-received by investors

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

• The zero coupon represented the low end of the marketed coupon range and was the 30th convertible debt offering this year to achieve a zero coupon

• The deal size was upsized from $750mm to $800mm

• Oak Street’s stock was up 0.5% during marketing, versus a typical stock price reaction of down 5 to 10%

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