By Rebecca Melvin
New York, March 5 - Cowen Group Inc. priced a slightly upsized $130 million of five-year convertible senior notes after the market close Tuesday to yield 3% with an initial conversion premium of about 30%, according to a news release.
The Rule 144A deal was initially talked at $125 million in size, and pricing came at the cheap end of 2.5% to 3% coupon talk and at the midpoint of 27.5% to 32.5% premium talk.
The greenshoe was upsized to $19.5 million of additional notes from $18.75 million.
Joint bookrunners were 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 entered into convertible note hedge and warrant transactions with an affiliate of Nomura, which has the effect of boosting the initial conversion premium from the issuer's perspective to 75%.
About $17.8 million of the proceeds will be used to pay the cost of the convertible note hedge transaction. The company also expects to use $340,000 of proceeds to repurchase shares of common stock from initial purchasers of the notes. Remaining proceeds are for general corporate purposes.
New York-based Cowen is a financial services company.
| Issuer: | Cowen Group Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $130 million, upsized from $125 million
|
| Greenshoe: | $19.5 million, upsized from $18.75 million
|
| Maturity: | March 15, 2019
|
| Bookrunners: | Nomura Securities International Inc., Cowen & Co. LLC
|
| Coupon: | 3%
|
| Price: | Par
|
| Yield: | 3%
|
| Conversion premium: | 30%
|
| Conversion price: | $5.33
|
| Conversion ratio: | 187.6173 shares
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Contingent conversion: | After Sept. 15, 1018 for cash only
|
| Takeover protection: | Yes
|
| Call spread: | Yes, boosts premium to 75% from issuer's perspective
|
| Price talk: | 2.5%-3%, up 27.5%-32.5%
|
| Pricing date: | March 4
|
| Settlement date: | March 10
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: COWN
|
| Stock price: | $4.10 at close March 4
|
| Market capitalization: | $478.2 million
|
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