Our Clients

Transaction Summary

• GUESS? had the goal of refinancing a majority of its Apr-2024 convertible notes in a refinancing package design to mitigate market risk and potential future dilution
• Matthews South wall-crossed new and existing investors to privately negotiate the transaction
• Matthews South designed a multiple step execution process that included 1) issuance of new convertibles in exchange for old bonds and new money, 2) an auction process for a new call spread that allowed the company to make its structuring decision at pricing, 3) a carefully crafted, competitive call spread unwind process to ensure fair value, and 4) ensuring all legs of the transaction resulted in no net stock for sale after accounting for company share repurchase

Transaction Highlights

• The company was able to exchange 62% ($185mm) of the existing bonds for $161mm of new bonds plus cash, while attracting $114mm of new money
• Our call spread bid process optimized pricing and flexibility, allowing the company to achieve an after-tax cost of 4.9% with an effective conversion premium of 120%
• The company used $43mm of proceeds to absorb any selling in the transaction, which supported the pricing of the convertible
• While executed on a private basis, initial trading indicated pricing effectiveness of a broad public process

Additional Deals for Guess?:

• Mar 2022: $175mm Accelerated Share Repurchase
• Apr 2019: $275mm Convertible + Call Spread