GAIN Capital to offer $80 million of Convertible Senior Notes

Maria Nikolova

GAIN Capital plans to use a portion of the net proceeds of the offering to repay outstanding indebtedness and the balance for general corporate purposes, which may include strategic acquisitions and share repurchases.

GAIN Capital Holdings, Inc. (NYSE: GCAP) has just announced its plans to offer $80 million aggregate principal amount of its convertible senior notes due 2022 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. GAIN Capital also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $12 million aggregate principal amount of the notes solely to cover over-allotments, if any.

The notes will be unsecured, senior obligations of GAIN Capital, and interest will be payable semi-annually in arrears. The notes will be convertible at the option of holders prior to the close of business on the business day immediately preceding April 15, 2022 only upon the occurrence of specified events or under certain circumstances. Thereafter, until the close of business on the business day immediately preceding the maturity date of August 15, 2022, the notes will be convertible at any time. Conversions of the notes will be settled by the delivery and/or payment, as the case may be, of GAIN Capital common stock, cash, or a combination thereof, at GAIN Capital’s election. Final terms of the notes, including the interest rate, initial conversion rate and other terms, will be determined by negotiations between GAIN Capital and the initial purchasers of the notes.

GAIN Capital intends to repurchase up to $15 million of its common stock from purchasers of notes in the offering in privately negotiated transactions effected through J.P. Morgan concurrently with the closing of the offering, which repurchases may be made using a portion of the net proceeds of the offering, amounts drawn under GAIN Capital’s existing credit agreement or other cash on hand or any combination thereof. These repurchases could increase, or prevent a decrease in, the market price of GAIN Capital common stock or the notes and could result in a higher effective conversion price for the notes.

GAIN Capital intends to use a portion of the net proceeds of the offering to repay outstanding indebtedness and the balance for general corporate purposes, which may include strategic acquisitions and share repurchases.

J.P. Morgan and Jefferies are acting as joint book-running managers of the offering.

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