Preferred stock may be converted into 267 million common shares
By Devika Patel
Knoxville, Tenn., Aug. 6 - Knight Capital Group, Inc. arranged a $400 million offering of 2% convertible preferred stock on Monday, according to an 8-K filed Monday with the Securities and Exchange Commission.
The company sold 400,000 preferreds at $1,000 apiece.
The preferreds will be convertible into about 267 million common shares for a conversion price equal to $1.50, which is a 62.96% discount to the Aug. 3 closing price of $4.05. The conversion ratio is 666.667 shares of common stock per preferred.
In addition, the preferreds will mandatorily convert into common stock if the closing price of the company's common stock exceeds 200% of the conversion price for 60 consecutive trading days.
Jefferies & Co., Inc., Jefferies High Yield Trading, LLC, Blackstone Capital Partners VI LP, Blackstone Family Investment Partnership VI ESC LP, Blackstone Family Investment Partnership VI LP, Getco Strategic Investments, LLC, TD Ameritrade Holding Corp., Stephens Investments Holdings LLC and Stifel Financial Corp. are the investors.
Settlement was expected to occur Monday.
The company said in a press release that "this capital infusion was undertaken in response to the extraordinary trading loss experienced by Knight on Aug. 1, which significantly depleted Knight's capital base and in turn precipitated a loss of customer and counterparty confidence and liquidity crisis that, if not immediately addressed, would have threatened Knight's ability to continue to operate.
"Today's capital infusion provides the liquidity and capital necessary to restore confidence to customers and the market and enables Knight to continue as an active participant in the capital markets."
Knight Capital is a financial services firm based in Jersey City.
| Issuer: | Knight Capital Group, Inc.
|
| Issue: | Convertible preferred stock
|
| Amount: | $400 million
|
| Preferreds: | 400,000
|
| Price: | $1,000
|
| Dividends: | 2%
|
| Conversion ratio: | Into about 267 million common shares
|
| Conversion price: | $1.50
|
| Conversion ratio: | 666.667 common shares per preferred
|
| Warrants: | No
|
| Investors: | Jefferies & Co., Inc., Jefferies High Yield Trading, LLC, Blackstone Capital Partners VI LP, Blackstone Family Investment Partnership VI ESC LP, Blackstone Family Investment Partnership VI LP, Getco Strategic Investments, LLC, TD Ameritrade Holding Corp., Stephens Investments Holdings LLC and Stifel Financial Corp.
|
| Pricing date: | Aug. 6
|
| Settlement date: | Aug. 6
|
| Stock symbol: | NYSE: KCG
|
| Stock price: | $4.05 at close Aug. 3
|
| Market capitalization: | $283.66 million
|
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