Refinancing your convertible RIs

Written by

Aditya Datta

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How we plan for the unknown with convertible RIs for our customers

In times of uncertainty, how to effectively manage cash flow and OpEx is a top concern for all leaders. We save our customers maximum dollars with 95% coverage and have planned to build in a hedge to reduce the coverage at a days notice if needed, due to unforeseen circumstances. Business cycles have proven time and again the need to being prepared.

Cloudwiry’s hybrid approach to maximize savings and hedge risks using Savings Plans & Convertible RIs is proving to be helpful for our customers in the current uncertain business cycle.

I would like to share a bit about how we are helping our mutual customers navigate the current uncertain business cycle and support their ongoing opex management needs.

Our customers are able to refinance their Convertible RIs similar to how a homeowner can refinance a 15 year mortgage to a 30 year mortgage and reduce monthly payments.
As an example, we can reduce the monthly convertible RI for ESW Capital, one of our premier customers in the US East 1a region from 219k/month to $69k/month, giving them maximum flexibility to manage monthly OpEx.

When Saving Plans were introduced in November, we had to rethink the way we were handling CRIs for our customers. After detailed analysis of Savings Plans, the customer decided to apply them for smaller regions with an additional hedge. Coverage was increased from 66% to 95% using existing 3 year cRIs with 380 days remaining. This resulted in net savings increase of 37% and a growing hedge to reduce monthly commitment which now allows them to reduce monthly commitment from $219k to 69k/month.

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