JWCA advises Rocket Lab on its debut and upsized $355 million convertible and capped call
February 2024 | read press release
Transaction Background
Rocket Lab successfully raised an upsized $355mm (including greenshoe) in the convertible market at attractive terms (4.25% coupon and 27.5% conversion premium). This marked the company's first capital markets transaction since their de-SPAC in the summer of 2021
Rocket Lab’s objectives included:
Opportunistically raise capital at low cost with limited covenants
Repay a portion of borrowing under the equipment financing agreement
Diversify investor base
Rocket Lab 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
Shareholder messaging
The transaction was conducted using a confidential marketing process before launching into a traditional one-day public marketing period to allow long only investors more time to analyze
JWCA designed and ran a capped call auction process to achieve competitive terms
JWCA provided advice, support and analysis throughout the execution process
Results
Rocket Lab was well received by investors, attracting significant demand and institutional interest:
The transaction was multiple times oversubscribed on the message of a strong book by the end of the confidential marketing process
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 Rocket Lab, maximizing the economics to the company