Ann: WEBJET ANNOUNCES AUD250 MILLION CONVERTIBLE NOTES OFFERING, page-16

Very clever move by Web. And the SP mini dump can explain itself . There is no risk on dilution to shares as this will not be exercisable till 2026 and the bottom price is at $5.18 .

1) It says in the statement “The New Notes allow Webjet to proactively derisk the refinancing of the current AUD130 million term debt due November 2022, have a materially lower cash interest cost than the current financing arrangements and provide Webjet with the ability to pursue strategic opportunities.” The entire reason of recent pull back in Nasdaq is due to the market expectation that inflation is running fast than US Fed’s estimate . The earliest date interests might be raised has now moved to early 2023 by some consensus. You don’t want to refinance your debt in an market with an immediate rising interest expectation. You want to capitalise on the current record low interest environment . Don’t leave it to the last minute. Web is only burning $4m a month , no biggie at all. Previous capital raise is sufficient. Don’t think we need to worry about the company fundamentals

2) If you were one of the major share holders of Web particular some super fund and you intend to hold it for 5+ years to realise your investment and are happy to settle for div before 2026 . What do you do ? You sell the Web at current price buy the convertible note at $5.18 . This will book you an instant return (10%+ ) while maintain your total number of shares held, exercisable 2026. You will get guaranteed 22.5% total return ,convertible at $6.35 and an additional 0.75% annual coupon. This equates to a 5% interest rate YOY . Better than putting in the bank better than Div . It is comparable to an equity swap deal. Take the cash ( By selling shares , the difference between circa $5.7 and 5.18, plus 0.75% annual interest , plus 11% return on today’s money after deduction of inflation at 2% annually with this guaranteed 22.5% , is your premium) to swap out the return on the number of shares held to hedge against potential SP fluctuation and negative return from current SP in the next 5 years. You may think it’s too conservative considering Web may return to its ATH in 2 years but with a guaranteed return over 20%+ in today’s money value , some super funds will do it.