JWCA ADVISES The MEDICINES COMPANY ON ITS $402.5 million Convertible bond offering and capped call purchase

JUNE 2016 | read press release

Transaction Background

J. Wood Capital Advisors advised The Medicines Company in its assessment of its capital structure alternatives related to the maturity of its convertible due 2017, and then advised them on the execution of a new convertible issuance and refinancing

• Provided capital structure analysis and advice related to:

  • Repurchase of a significant portion of the Company’s existing 1.375% Convertible Notes due 2017, thereby pushing out maturity by 6 years

  • Structuring of transaction, including the following recommendations:

    • Provisional call feature to give the Company the flexibility to redeem the notes early if conditions are optimal

    • Purchase of a capped call to increase the effective conversion price to $64.68

    • Unwind of the existing call spread

• Assisted the team with documentation, accounting, and tax review

• Provided advice, support and analysis during the execution

Results

The Company executed a successful liability management exercise:

• Priced the new Convertible with Company-friendly terms: priced at the midpoint of the coupon range and the high end of the conversion premium range

• Repurchased $220mm of their existing 1.375% convertible due 2017

  • Pushed out maturity on a sizable portion of their liability by 6 years

  • Reduced dilutive impact by ~2.5 million shares

  • Unwound associated call spread on Company-friendly terms

  • MDCO stock traded essentially flat (0.6%) on the day of execution (vs a typical decline of ~5%)

• Purchased a capped call to increase the effective strike price +75%

  • Capped call negotiation process drove meaningful savings for the Company