JWCA advises TWILIO on its $550 million DEBUT convertible bond AND CAPPED CALL

mAY 2018 | read press release

Transaction Background

Twilio experienced revenue growth of over 40% and stock price growth of 120%+ in early 2018, and was interested in raising capital to finance its expansion. Twilio selected JWCA to advise on its execution in light of its experience, depth of capabilities, and lack of conflicts.

JWCA provided extensive analytics and support to aid in key decisions:

• Call spread vs capped call purchase
• Redemption structure
• Stakeholder messaging
• Change of control and make-whole mechanics
• Tax integration of capped call
• Syndicate selection
• Provisions of capped call contract forms

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

Results

Twilio’s convertible issuance was very well-received by investors:

• Strong investor demand led to an upsize from a base deal size of $435mm to $475mm
• Priced at the company-friendly end of the marketed premium range (35% vs 30 – 35%) and the midpoint of the coupon range (0.25% vs 0.00 – 0.50%)
• Stock price fell only ~2.0% on execution day

Capped call documentation and negotiation process produced meaningful savings for Twilio, while mitigating future downside scenarios