Deal sells 14,657,980 preferreds at $16.37333; $120 million 5% notes
A report in the Prospect News PIPE Daily for May 5 gave an incorrect amount for the private placement by RCS Capital Corp. A corrected report follows.
By Devika Patel
Knoxville, Tenn., May 2 - RCS Capital Corp. completed a $320 million sale of series A convertible preferred stock and senior unsecured convertible notes on April 29, according to an 8-K filed Friday with the Securities and Exchange Commission. It raised $240 million through the preferreds and $80 million from the notes.
The company sold 14,657,980 preferreds at $16.37333 apiece, which is a 55.08% discount to the April 28 closing share price of $36.45. The preferreds sold for a total of $240 million and have a liquidation preference of $270 million.
The 7% preferreds are convertible into class A common stock at the lower of a 2% discount to the one-day volume-weighted average price of the stock for the 10 trading days preceding the conversion, a 2% discount to the closing price of the stock on the conversion date or $20.26, which is a 44.42% discount to the April 28 closing share price.
The convertibles were sold at a price of $666.67 per $1,000 of convertibles. The 5% convertibles mature on Nov. 1, 2021. Each $1,000 of convertibles converts into 47.2144 class A common shares.
Luxor Capital Group, LP was among the investors.
Proceeds were used to help fund the acquisition of Cetera Financial Holdings, Inc.
RCS is a New York-based holding company that operates and grows businesses focused on the financial services industry.
Issuer: | RCS Capital Corp.
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Issue: | Series A convertible preferred stock, senior unsecured convertible notes
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Amount: | $360 million
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Warrants: | No
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Investor: | Luxor Capital Group, LP
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Settlement date: | April 29
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Stock symbol: | NYSE: RCAP
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Stock price: | $36.45 at close April 28
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Market capitalization: | $889.84 million
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Preferreds
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Amount: | $240 million
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Liquidation preference: | $270 million
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Preferreds: | 14,657,980
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Price: | $16.37333
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Dividends: | 7%
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Conversion price: | Lower of 2% discount to one-day volume-weighted average price of the stock for 10 trading days preceding conversion, 2% discount to closing price of the stock on conversion date or $20.26
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Convertibles
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Amount: | $120 million
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Proceeds: | $80 million
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Maturity: | Nov. 1, 2021
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Price: | $666.67 per $1,000 of notes
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Coupon: | 5%
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Conversion ratio: | 47.2144 class A common shares per $1,000 of convertibles
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