When convertible bonds are repurchased or a change of control is triggered due to an issuer being acquired for cash, call spreads and capped calls may also need to be sold back to the banks or “unwound.” These can be some of the most highly complex and nuanced financial transactions, with banks serving as counterparties and often having significant discretion in calculating the unwind amount. This in turn creates a conflict of interest that can put issuers at a disadvantage. ICR Capital’s Convertible and Equity Derivatives Advisory team can provide significant value to clients by serving as an independent advisor who sits on your side of the table and adds transparency to an opaque process.
Our team of experienced advisors understands the intricacies of call spread and capped call unwind transactions and works closely with you to achieve the best pricing. We can help with all aspects of the transaction, including analyzing the value of the call spread, reviewing existing documentation, breaking down the accounting and tax implications, and negotiating favorable terms. As an extension of your team, we work with you every step of the way, providing guidance, insight, and support to ensure the best possible outcome.
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