JWCA advises Semtech on its $402.5 million zero-coupon convertible and capped call transaction to refinance its outstanding convertible notes

October 2025 | read press release

Transaction Background

Semtech Corp (“Semtech” or the “Company”) successfully raised $402.5mm (inclusive of greenshoe) in the convertible market at highly attractive terms (0.00% coupon and 42.5% conversion premium). Semtech concurrently exchanged ~$219mm (~69%) of its outstanding 2027 convertible notes and the full ~$62mm (100%) of its outstanding 2028 convertible notes

Semtech took advantage of strong underlying convertible market conditions and meaningful momentum in its stock price (~150% appreciation over the past 6 months and ~65% appreciation year-over-year) to successfully execute its convertible bond issuance

Semtech’s objectives included:

  • Opportunistically refinance in-the-money 2027 & 2028 convertible notes and repay outstanding term loan borrowings to manage outstanding liabilities and capital structure while reducing interest expense costs and executing as efficiently as possible

  • Drive EPS accretion and minimize impact to leverage

  • Protect against future equity dilution through a derivative overlay

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

  • Refinancing tactics and analysis

  • Convertible and derivative overlay structuring, accounting analysis and tax implications

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

  • Execution timing, strategy, and shareholder messaging

  • Managing call spread unwind negotiations

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

JWCA provided advice, support and analysis throughout the execution process

Results

Semtech’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 42.5% conversion premium represented the high end of the marketed premium range

The Company simultaneously exchanged ~$219mm (~69%) and ~$62mm (100%) of its outstanding 2027 and 2028 convertible notes, respectively, delivering par value in cash and the value above par in shares

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

Semtech achieved the best terms for a sub-$10bn convertible issuer since March 2021