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