By Rebecca Melvin
New York, March 15 - Knight Capital Group Inc. priced an upsized $325 million of five-year cash convertibles after the close of markets on Monday at par to yield 3.5% with an initial conversion premium of 32.5%.
The Rule 144A offering, which was launched ahead of the market open, was upsized from an initially talked $300 million and came at the midpoint of price talk, which was 3.25% to 3.75% for the coupon and 30% to 35% for the premium.
The over-allotment option was increased to up to an additional $50 million of notes from $45 million.
J.P. Morgan Securities Inc. was running the books.
There are no calls or puts, and the notes will be cash settled, which is less dilutive to shareholders, as opposed to net-share settled.
Concurrently with the pricing of the notes, Knight Capital entered into privately negotiated cash convertible note hedge and warrant transactions.
Proceeds will be used to repay $140 million in a senior secured term loan facility and senior secured revolving facility and to pay for hedge and warrant transactions. The remainder will go toward general corporate purposes.
The hedge transactions are intended to reduce the issuer's exposure to potential cash payments in excess of the principal.
Upon cash conversion, Knight will deliver an amount of cash calculated over the applicable observation period.
Based in Jersey City, N.J., Knight Capital Group is a financial services firm.
| Issuer: | Knight Capital Group Inc.
|
| Issue: | Convertible bonds
|
| Amount: | $325 million, upsized from $300 million
|
| Greenshoe: | $50 million, increased from $45 million
|
| Maturity: | March 15, 2015
|
| Bookrunner: | J.P. Morgan Securities Inc.
|
| Coupon: | 3.5%
|
| Price: | Par, $1,000
|
| Yield: | 3.5%
|
| Conversion premium: | 32.5%
|
| Call protection: | Non-callable
|
| Puts: | No puts
|
| Net share settlement: | No, cash settled
|
| Price talk: | 3.25%-3.75%, up 30%-35%
|
| Pricing date: | March 15
|
| Distribution: | Rule 144A
|
| Stock listing: | Nasdaq: NITE
|
| Market capitalization: | $1.49 billion
|
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