Call Spreads

The call spread bid process is more complex than it appears and requires swift execution on the day of the deal. The bid manager has roughly 2 hours to receive and analyze bids, negotiate with the top bidders, finalize a call spread syndicate, and communicate the deltas to the convertible lead bookrunner. Furthermore, investment banks, while important partners in the transaction, face significant conflicts of interest because they act as counterparties in the call spread.

As your financial advisor, ICR Capital’s Convertible and Equity Derivatives Advisory team ensures transparency by supporting your perspective throughout the process.

Based on your specific objectives, we work with your deal team to:

• Determine the optimal structure
• Consider accounting and tax implications
• Establish the ideal syndicate
• Provide an edge by utilizing our proprietary database and custom-designed software
• Streamline documentation and improve various provisions and thresholds
• Optimize the process, address significant and minor loopholes, and de-risk the transaction for the future
• Achieve the best pricing

On average, our clients save over 150bps of value in the call spread auction alone.