What is the expected timeline for the issuance of the new senior subordinated secured notes and equity, and how might that timeline affect short‑term trading strategies?

Expected timeline

LivePerson’s de‑leveraging deal is structured as a “exchange‑and‑issuance” transaction. The press release notes that the company will receive $45 million in cash and will issue $115 million of new 2029 Senior Subordinated Secured Notes together with a tranche of common‑ and preferred‑equity. In comparable capital‑structure swaps, the issuance of the new securities and the equity‑closing typically occurs within 30‑45 days after the exchange agreement is signed, with the final closing slated for the end of the current calendar year. Thus, traders should expect the 2029 notes and the equity to be priced and delivered by late Q4 2025 (approximately October‑December 2025).

Short‑term trading implications

1. Equity volatility around the issuance date – The conversion of $341 million of 2026 convertible notes into cash and new equity will improve LivePerson’s balance sheet, removing a sizable liability. Anticipation of a cleaner capital structure often fuels a short‑term rally in the stock, but the simultaneous dilution from the equity tranche can cap upside. Expect the price to trade in a relatively tight range until the issuance window opens, then a 10‑15 % bounce is plausible if the market perceives the de‑leveraging as a credit‑enhancing move. Positionally, a light‑to‑medium long on the stock a week before the expected issuance (e.g., early‑mid November) can capture the upside, with a stop just below the recent low to protect against a sell‑off if the equity component is viewed as overly dilutive.

2. Credit‑spread play on the 2029 senior notes – The new 2029 subordinated secured notes will be priced at a spread to the U.S. Treasury curve that reflects their subordinated, but secured, nature. In the weeks leading up to issuance, the spread will likely compress as investors price in the higher credit quality of a secured claim, then may widen briefly on the first day of trading if market participants reassess the subordination risk. A short‑term relative‑value trade—buying the notes on the secondary market at a tighter spread and selling a few days after issuance if the spread expands—can generate a modest carry. Alternatively, a spread‑sell (shorting the notes via futures or credit‑default swaps) can be profitable if the spread widens beyond the issuance level.

3. Liquidity and order‑flow considerations – Because the transaction size is modest ($115 million of notes, $45 million of cash), the market impact will be limited, but the announcement‑driven trading volume can be significant. Anticipate higher-than‑average daily volume and tighter bid‑ask spreads in the equity and note markets during the issuance window. Swing‑traders should monitor the order‑flow imbalance on the NASDAQ and the over‑the‑counter note market; a persistent buying pressure in the equity after the issuance announcement can be a cue to add to long positions, while a sharp sell‑off in the notes may signal a short‑covering opportunity for note‑shorts.

In short, the late‑2025 issuance window creates a defined event horizon. A long‑biased equity play on the bounce‑back after the de‑leveraging, paired with a credit‑spread trade on the 2029 senior notes, offers the most direct way to capture the short‑term alpha that this capital‑structure swap is likely to generate. Keep risk limits tight—stop‑losses at 5‑7 % for the equity and a 10‑bp spread‑move for the notes—to manage the inherent event‑risk.