By Stephanie N. Rotondo
Seattle, Aug. 17 – GAIN Capital Holdings Inc. priced $80 million of five-year convertible senior notes at par to yield 5% with an initial conversion premium of 20%, the company said in a press release on Thursday.
The Rule 144A deal came in line with price talk.
J.P. Morgan Securities LLC and Jefferies & Co. are the joint bookrunners.
There is a $12 million over-allotment option.
Conversions will be settled in cash, common stock or a combination of the two, at the company’s option. The initial conversion rate is 122.0107 shares per each $1,000 of notes, equal to a conversion price of $8.20.
The notes are contingently convertible prior to April 15, 2022. After that, the notes are convertible at any time.
The bonds are non-callable for three years. After that, the issue is provisionally callable, if the stock hits a 130% price hurdle.
The paper is putable upon a fundamental change.
In connection with the offering, GAIN intends to repurchase $14.5 million of its common stock from purchasers of the notes via privately negotiated transactions. A portion of the deal’s proceeds may be used for that purpose.
The company is buying the shares back at $6.83 per share, Wednesday’s closing share price.
Otherwise, the company will use proceeds to repay outstanding debt – including its 4.125% convertible notes due 2018 – and for general corporate purposes, which may include strategic acquisitions and share repurchases.
GAIN Capital is a Bedminster, N.J.-based provider of trading technology and execution services.
| Issuer: | GAIN Capital Holdings Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $80 million
|
| Greenshoe: | $12 million
|
| Maturity: | Aug. 15, 2022
|
| Bookrunners: | J.P. Morgan Securities LLC and Jefferies & Co.
|
| Coupon: | 5%
|
| Price: | Par of $1,000
|
| Yield: | 5%
|
| Initial conversion premium: | 20%
|
| Initial conversion price: | $8.20 a share
|
| Initial conversion rate: | 122.0107 shares
|
| Provisional call: | After three years if the stock hits a 130% price hurdle
|
| Contingent conversion: | Prior to April 15, 2022
|
| Put option: | Upon a fundamental change at par plus accrued interest and a make-whole premium
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| Pricing date: | Aug. 17
|
| Settlement date: | Aug. 22
|
| Distribution: | Rule 144A
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| Talk: | 5% yield, up 20%
|
| Stock symbol: | NYSE: GCAP
|
| Stock price: | $6.83 as of Aug. 16 close
|
| Market capitalization: | $289.083 million
|
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