Our Clients

Structuring

• Equity holders were pleased that the company was proactively raising opportunistic capital at very attractive terms
• Matthews South advised on this multi-step transaction, which included a repurchase of $400mm notional of the existing convertible and issuance of a new convertible and call spread
  • By refinancing the existing convertible, the company eliminated additional dilution until the stock price doubles
  • The refinancing also allowed the company to raise ~$630mm of additional cash at very attractive terms and without any negative stock price impact
• Matthews South helped the company navigate multiple work streams for efficient execution

Call Spread Process

• Our bid process optimized pricing and allowed the company to achieve an all-in yield of 1.39% (inclusive of the call spread cost) with an effective conversion premium of 100% (no dilution until stock more than doubles)

Marketing and Pricing

• Matthews South helped to ensure that the security was priced optimally
• Cloudflare achieved zero interest expense on a 5-year security and priced off of an all-time high closing price as the stock rallied 1.7% during the day of marketing
  • The deal was also upsized from a $1bn launch size
  • First marketed zero coupon convertible since May (ON) and highest premium for zero coupon convertible since March (ABNB)

Additional Deals for Cloudflare

• May 2020: $500mm Convertible