Cowen Group to price $125 million five-year convertibles to yield 2.5%-3%, up 27.5%-32.5%

By Rebecca Melvin

New York, March 3 - Cowen Group Inc. plans to price $125 million of five-year convertible senior notes after the market close Tuesday that were talked to yield 2.5% to 3% with an initial conversion premium of 27.5% to 32.5%, according to a syndicate source.

The Rule 144A deal has a greenshoe for up to $18.75 million of additional notes.

Joint bookrunners are Nomura Securities International, Inc. and Cowen and Co. LLC.

The non-callable notes will mature on March 15, 2019. They are contingently convertible into cash only after Sept. 15, 2018.

In connection with the pricing of the notes, the company plans to enter into convertible note hedge and warrant transactions with an affiliate of Nomura.

A portion of the proceeds will be used to pay the cost of the convertible note hedge transaction. The company also expects to use up to $15 million of proceeds to repurchase shares of common stock from purchasers of the notes in privately negotiated transactions, which are expected to be consummated concurrently with closing of the offering. Remaining proceeds are for general corporate purposes.

New York-based Cowen is a financial services company.

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