Gain Capital increases convertible note offering, raises $70 million

Funds to be used for debt repayment, share buybacks and potential strategic acquisitions

Retail forex broker GAIN Capital (NYSE:GCAP) has just announced that it has successfully priced and increased the size of its convertible note offering to $70 million. The company also issued to the initial purchasers a 30-day option to purchase additional $10 million of notes to cover over-allotments. Initially GAIN Capital announced that it is planing to raise $65 million as we reported yesterday.

As we have already mentioned in a separate piece this is putting an overhang on the share prices of GAIN Capital as investors buying the convertibles are typically hedging their exposure by shorting the stock. The share price performance has been quite steady this year, but it’s worth to pay close attention whether after yesterday’s drop and in the aftermath of the bonds sale they can keep marching higher.

GAIN Capital is expecting to raise around $67.5 million after the deduction of discounts to initial buyers. The company has announced that it will be using the funds raised to repay $33.2 million of debt, share buybacks and potentially for strategic acquisitions. The interest rate on the notes is at a fixed rate of 4.125% per year and they will remain convertible until the last business day before the 1st of June 2018.

The sale of the notes is closing on the 27th of November. We will be watching closely share price developments in the coming days so stay tuned to LeapRate for more details related to the publicly listed companies in the forex industry.

For the full press release visit the investor relations sections of Gain Capital’s website.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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