Our Clients

Capital Structure Advice

• Matthews South worked broadly with the company and its board to determine the appropriate capital raise instrument (TLA, TLB, bond or convert) and size given Etsy’s strategic and balance sheet objectives
• Once the convertible option was selected, Matthews South helped evaluate the various structural alternatives with the base security and call spread
• Additionally, Matthews South helped the company think through the appropriate share repurchase size and strategy

Convertible and Capped Call Execution

• Matthews South recommended the company pursue an overnight bought deal structure because the “delta neutral” structuring meant that Etsy could achieve favorable terms and eliminate all market risk
• Terms achieved (0.125% up 47.5% with no stock price risk for a 7y bond) were among the best of any convertible in the past few years
• Matthews South helped Etsy orchestrate auctions for both convertible and capped call; the participants in each auction were carefully selected to optimize for the price competition and relationship management objectives
• Matthews South advised the company on all relevant documentation, which included several company friendly provisions in the capped call

Investor Reception

• The transaction was oversubscribed despite the abbreviated marketing period
• The security traded at par in the aftermarket confirming that Etsy achieved efficient pricing

Additional Deals for Etsy:

• June 2021: $1.0bn Convertible Notes Offering + Capped Call
• August 2020: $650mm Convertible Offering + Repurchase of $301mm Existing Convertibles
• March 2018: $345mm Convertible + Capped Call + Share Repurchase