June 2024
Case Study

Granite
Construction

Granite Construction is one of the largest diversified construction and construction materials companies in the United States.

Transaction Terms
Offering Size
$373.75MM ($325MM Base + $48.75MM Greenshoe)
Security
3.25% Convertible Senior Notes
Maturity
2030 (6 Years)
Conversion Premium
30%
Capped Call
Up 100%
Use of Proceeds
Repurchase 97% of remaining of 2.75% convertible senior notes due 2024; repay term loan
Execution
144A, wall-crossed, overnight
97%
Of remaining 2024s
successfully repurchased
Up 100%
Cap price set above
then all-time high stock price
3rd
Consecutive mandate
for Granite
Situation Overview

Further balance sheet
optimization

As Granite's 2024 convertible notes approached maturity, Granite shares had rallied above the corresponding call spread upper strike, resulting in dilution risk to the existing structure.

HudsonWest’s Role

A follow-up
overnight execution

01
Delta-Neutral Overnight Strategy

HudsonWest devised a strategy to execute a new convertible on an overnight basis, leveraging existing hedges to repurchase 97% of the remaining 2024s with strong investor demand.

02
6-Year Maturity Structuring

The new notes were structured as a 6-year maturity to optimize debt distribution. GVA also used proceeds paid down its Term Loan A, resulting in GAAP accretion.

03
Improved Terms

Granite locked in a lower coupon and a higher conversion price than its 2023 offering.

04
Capped Call Auction

HudsonWest designed an efficient capped call auction to hedge the conversion price up 100%.

Other Granite Construction Transactions
May 2022
$50MM Accelerated Share Repurchase
View Case Study →
May 2023
$373.75MM Convertible + $199MM Concurrent Repurchase
View Case Study →
February 2026
$100MM Exchange of 2028 Notes & $100MM Capped Call Unwind
View Case Study →
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