
June 12, 2025
$1.75bn + $250mm Greenshoe
Maturity: 5 Years
Execution Structure: 1-Day Public Marketing
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0.00% (0.00 - 0.25% marketing range)
Premium: 45.0% (40.0 - 45.0% marketing range)
Effective Premium: Up 175% ($469.73) with Capped Call
Matthews South Role: Financial Advisor
Lead Left Bookrunners: Goldman Sachs
Active Bookrunners: Citi / Morgan Stanley / Wells Fargo
Execution Structure: 1-Day Public Marketing
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0.00% (0.00 - 0.25% marketing range)
Premium: 45.0% (40.0 - 45.0% marketing range)
Effective Premium: Up 175% ($469.73) with Capped Call
Matthews South Role: Financial Advisor
Lead Left Bookrunners: Goldman Sachs
Active Bookrunners: Citi / Morgan Stanley / Wells Fargo
$2 billion Convertible + Capped Call
Structuring
- Matthews South advised Cloudflare on its $2 billion convertible issuance, representing the company’s third equity-linked financing since its 2019 IPO
- We helped Cloudflare navigate multiple workstreams, focusing on optimal structuring, syndicate selection, documentation, accounting analysis and tax considerations, and pricing and execution of the transaction
Capped Call Process
- Matthews South ran a capped call auction with 20+ banks which were asked to provide pricing on multiple structures and allocations, ultimately allowing Cloudflare to secure efficient pricing with an effective conversion premium of up 175%
- The up 175% cap is the highest call spread upper strike ever achieved in the corporate call spread market
Marketing and Pricing
- The new convertible offering was priced at the low end of the marketed coupon range (0.00% vs. 0.00 – 0.25%) and the high end of the marketed conversion premium range (45.0% vs. 40.0 – 45.0%)
- This represents the best priced convertible offering (coupon + conversion premium pairing) since 2021 and the 13th zero coupon convertible financing YTD
Additional Deals for Cloudflare