March 13, 2024
$1.1bn + $165mm Shoe
Maturity: 6 Years
Execution Structure: 1-Day Public Marketing
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0.25% (0.50-1.00% Marketing Range)
Premium: 32.5% (27.5-32.5% Marketing Range)
Capped Call Strike: Up 100.0%
Matthews South Role: Financial Advisor
Bookrunners: Citi / Goldman Sachs
Execution Structure: 1-Day Public Marketing
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0.25% (0.50-1.00% Marketing Range)
Premium: 32.5% (27.5-32.5% Marketing Range)
Capped Call Strike: Up 100.0%
Matthews South Role: Financial Advisor
Bookrunners: Citi / Goldman Sachs
$1.265 Billion Convertible + Capped Call
- Transaction Overview
- Coinbase took advantage of a +45% YTD stock price performance and strong convertible market conditions to issue $1.265 billion of new 0.25% Convertible Notes due 2030
- The company used the proceeds of the offering to purchase an up 100% capped call and intends to use remaining proceeds to repay at maturity, or repurchase or redeem prior to maturity, its existing convertible notes and senior notes
- We helped the company navigate multiple work streams, focusing on pricing and execution of the new convertible offering, and leading the new capped call auction
- Call Spread Process
- Our proprietary software allowed us to conduct an extensive auction and synthesize the results quickly
- Broad auction where banks provided bids on multiple allocations and multiple price points, ultimately allowing the company to optimize pricing with an effective conversion premium of 100.0% (no dilution until stock price doubles)
- Marketing and Pricing
- Due to strong investor demand, the base deal was upsized from $1.0 billion to $1.1 billion
- The new convertible offering was priced better than the marketed coupon range (0.25% vs. 0.50% – 1.00%) and at the high end of the marketed conversion premium range (32.5% vs. 27.5% – 32.5%)
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