May 27, 2025
$2.5bn + 10% Greenshoe
Maturity: 5 Years
Execution Structure: 1-Day Public Marketing
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0% (0 - 0.25% marketing range)
Premium: 42.5% (37.5 - 42.5% marketing range)
Effective Premium: Up 150% ($512.23) with Call Spread
Matthews South Role: Financial Advisor
Lead Left Bookrunner: J.P. Morgan
Active Bookrunners: Bank of American / UBS
Execution Structure: 1-Day Public Marketing
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0% (0 - 0.25% marketing range)
Premium: 42.5% (37.5 - 42.5% marketing range)
Effective Premium: Up 150% ($512.23) with Call Spread
Matthews South Role: Financial Advisor
Lead Left Bookrunner: J.P. Morgan
Active Bookrunners: Bank of American / UBS
$2.75 billion Convertible + Call Spread
Transaction and Process Overview
- Structuring
- Matthews South advised DoorDash on the issuance of its inaugural convertible security as an opportunistic capital raise
- We assisted the company in navigating multiple work streams, focusing on optimal structuring, documentation, accounting analysis, tax considerations, and pricing and execution of the transaction
- Call Spread Process
- Our proprietary software allowed us to conduct an extensive auction and synthesize the results efficiently
- Auction included 20+ banks who were asked to provide pricing on multiple structures and allocations, ultimately allowing the company to optimize pricing and achieve a pre-tax yield of ~2.7% (inclusive of the call spread cost) with an effective conversion premium of 150% (no dilution until stock price is more than 2.5x its level at pricing)
- Marketing and Pricing
- The new convertible offering was priced at low end of marketed coupon range (0% vs. 0 – 0.25%) and high end of the marketed conversion premium range (42.5% vs. 37.5 – 42.5%)
- Due to strong outright investor demand, the stock was down only 0.6% on a day when the broad S&P 500 index was up 2.0%
