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by | March 27, 2021 |

Our Clients

February 23, 2021
$1.306bn Convertible Offering
Size: $1.306bn + 10% shoe(Split evenly between tranches)
Offering Type: 144A
Execution Structure: 1-Day Marketed
Maturity: 5 and 7 Years
Structure: Provisional Call with Make-Whole
Coupon: 5 Year: 0% | 7 Year: 0%
Premium: 5 Year: 65% | 7 Year: 52.5%
Call Spread: Up 100%
Financial Advisor: Matthews South
Bookrunners JP Morgan, Goldman, Bank of America, RBC

$1.3bn Dropbox Convertible

Convertible Preparation Process

  • Matthews South ran the structuring, documentation, and preparation process and acted as an extension of the company’s finance team
  • Banks were invited into process after nearly all documentation and structuring were completed

Designed Call Spread Bid Process to Optimize Terms

  • Recommended adding financial institutions that have displayed aggressiveness in other bid situations, especially important as call spread market has shown a divergence of prices between banks
  • One of the company’s main objectives was to limit the after-tax cost of the call spread
  • The competitive bid process resulted in an after-tax yield, inclusive of the call spread cost, of ~5bps and ~10bps for the 5 and 7 year tranches, respectively

Make-Whole Table

  • Make-Whole tables are increasingly important to issuers given provisionally callable bonds with make-whole, but issuers lack the tools to assess bank-proposed tables
  • Matthews South oversaw the table creation to ensure fairness to the company

Marketing & Pricing

  • Matthews South advised the company on launch range and throughout the day of execution to help ensure that the security was priced efficiently
  • The bonds traded close to par after the offering which confirm that Dropbox achieved optimal pricing

Contact Us

To learn more about our solutions or to schedule a demo of our software, please contact us by filling out the form below, or email us at info@matthewssouth.com.






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