Macrovision (MVSN) is taking part in the trend that we have highlighted several times in the past few months --the increasing role of debt in software company capitalization.
Macrovision announced [subscription required] the offering of $175mm of convertible notes today. Of particular note is that they are also entering into a call spread arrangement (which we highlighted in detail in a previous post on Symantec's (NASDAQ:SYMC) recent financing) and using a portion of the proceeds ($50mm) to repurchase common stock. Just like Symantec and CA (NASDAQ:CA), they are doing a leveraged recapitalization. Instead of turning to the straight debt markets, such as high yield or bank, they have chosen to use a convertible bond as the funding vehicle. Why? Lowest cost and execution risk.
MVSN 1-yr chart: