Actionable Ideas for Companies and Sponsors

Convertible Bonds for Smaller Companies

The strength of the convertible market has created a compelling financing window for smaller, growth-oriented companies that may lack profitability. Investors have become receptive to smaller capital raises—between $75 and $150 million—for issuers with market caps as small as $300 million. These financings provide access to low-coupon, covenant-free debt that allows high-growth companies to maximize strategic and operational flexibility. Jefferies recently acted as sole underwriter on the $80 million convertible bond offering for PAR Technology, which is a $400 million market cap company undergoing a business transformation from a lower margin hardware business to a higher growth software company. The financing was upsized, given significant investor demand, and provided PAR Technology with the growth capital to accelerate its software business transition and to pursue potential tuck-in acquisitions.