Our Clients

Transaction and Process Overview

Structuring

• Matthews South helped the company evaluate various bank proposals on both economics and structure of convertible and call spread
• Recommended pursuing an overnight bought deal structure given the current favorable market dynamics – no stock price risk and known terms prior to launch
• Introduced novel language into capped call document to improve issuer leverage vs. banks in future unwind scenarios

Designed Bid Process to Optimize Terms

• Designed and managed bid process on both the convertible and capped call
• Obtained prices on several different structures so the company could optimize price and structural objectives
• Terms achieved through the convertible bid were 50bps better than the company friendly end of the proposed marketing ranges – 0% up 37.5% represents the best terms for a zero coupon bond in 2017-2018

Cost Reduction

• Banks earned net fees of 1.5%, a 1.0% savings relative to typical fees of 2.5% for marketed deals of this size
• The security traded at par in the aftermarket confirming that Etsy achieved efficient pricing

Strong Market Reaction

• Attractive mix of outright and hedge investors; and strong stock price reaction in light of favorable terms

Additional Deals for Etsy:

• Sep 2019: $650mm Convertible + Capped Call + Share Repurchase
• August 2020: $650 Million Convertible Offering + Repurchase of $301mm Existing Convertibles
• June 2021: $1.0 Billion Convertible Notes Offering