INTL FCStone completes issuance and sale of $350m of senior secured notes

Maria Nikolova

INTL FCStone intends to use the net proceeds from the sale of the notes, together with cash on hand, to fund the cash consideration for acquisition of GAIN Capital.

INTL FCStone Inc (NASDAQ:INTL) announces the completion of the issuance and sale of $350 million in aggregate principal amount of its 8.625% Senior Secured Notes due 2025.

The notes were issued at the offering price of 98.5% of the aggregate principal amount thereof. The Notes were issued pursuant to an Indenture, dated June 11, 2020, by and among INTL FCStone, the guarantors party thereto from time to time and The Bank of New York Mellon, as trustee and collateral agent.

As previously guided, INTL FCStone plans to use the net proceeds from the sale of the Notes, together with cash on hand, to

  1. fund the cash consideration for the merger of the Company’s wholly-owned subsidiary and GAIN Capital, pursuant to the Agreement and Plan of Merger dated as of February 26, 2020 and approved by GAIN’s stockholders on June 5, 2020,

  2. fund the repayment of GAIN’s 5.00% Convertible Senior Notes due 2022 and

  3. pay certain related transaction fees and expenses.

INTL FCStone has deposited the gross proceeds from the sale of the Notes, as well as escrow agency fees and interest on the Notes to (but not including) the date that is two months from the date of the closing of the offering of the Notes, into a segregated escrow account until the date that certain escrow release conditions are satisfied. Until the earlier of the satisfaction of the escrow release conditions or occurrence of a special mandatory redemption, on each two-month anniversary of the date of the closing of the offering of the Notes, the Company will deposit into the escrow account amounts sufficient to pay escrow agency fees and interest on the Notes for the following two-month period. Among other things, the escrow release conditions include the consummation of the Merger.

Following satisfaction of the escrow release conditions, the Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior second lien secured basis, by certain subsidiaries of INTL FCStone that guarantee the Company’s senior credit facility and by GAIN and certain of its domestic subsidiaries. After satisfaction of the escrow release conditions, the Notes and the related guarantees will be secured by liens on substantially all of INTL FCStone’s and the Guarantors’ assets, subject to certain customary and other exceptions and permitted liens.

If the merger has not been consummated on or prior to November 27, 2020 or upon the occurrence of certain other events, INTL FCStone will be required to redeem the Notes at a price equal to 100% of the issue price of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date.

The Notes will mature on June 15, 2025. Interest on the Notes accrues at a rate of 8.625% per annum and is payable semiannually in arrears on June 15 and December 15 of each year, commencing on December 15, 2020. The company is obligated to make each interest payment to the holders of record of the Notes on the immediately preceding June 1 and December 1.

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