Matthews South

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June 10, 2025
$650mm + $50mm Greenshoe
Maturity: 5 Years
Execution Structure: 1-Day Marketed
Structure: Provisionally Call with Make-Whole in Year 3
Coupon: 1.0% (1.0% - 1.5% Marketing Range)
Premium: 42.5% (40.0% – 45.0% Marketing Range)
Concurrent Stock Buyback: $150mm
Matthews South Role: Financial Advisor
Bookrunners: Goldman Sachs, JPMorgan, Citi

$700 million Convertible Notes Offering + Repurchase of $150 million of Common Stock

Capital Structure Advice

  • Matthews South advised the Company on its financing strategy as it retains a strong balance sheet with moderate leverage in anticipation of its upcoming debt maturities and other capital allocation objectives
  • We provided strategic guidance on the optimal structuring including decisions not to pursue a call spread and focus on share repurchase instead
  • Matthews South helped the company manage execution of the transaction and helped navigate multiple workstreams on an accelerated timeline

Marketing and Pricing

  • The convertible offering priced towards issuer-friendly terms (1.0% coupon / 42.5% conversion premium) during an extremely busy week in the market with limited investor focus
  • Repurchase of $150 million of stock offsets dilution from convertible at stock prices up to 2x the stock price at pricing
  • Stock price reacted well to the transaction (down 2.6%) despite raising net proceeds equivalent to ~9% of its market capitalization

Matthews South has advised Etsy on all 5 of its convertible transactions, totaling $3.3 billion

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