DFC Global Corp. Prices $200 Million of Senior Convertible Notes
April 10 2012 - 7:25PM
Business Wire
(NASDAQ: DLLR) - DFC Global Corp., a leading international
diversified financial services company serving primarily unbanked
and under-banked consumers for over 30 years, today announced that
it has priced $200 million aggregate principal amount of 3.25%
senior convertible notes due 2017. The notes will be sold to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended. Subject to customary
conditions, the sale is expected to close on April 16, 2012. The
Company has granted to the initial purchasers of the notes the
right to purchase up to an additional $30 million aggregate
principal amount of notes solely to cover overallotments.
The notes will be unsecured, senior obligations of the Company
and will pay interest semi-annually at a rate of 3.25%. Prior to
October 15, 2016, the notes will be convertible only upon the
occurrence of certain events and during certain periods, and
thereafter, at any time until the second scheduled trading day
preceding the maturity date. Upon conversion, holders will receive
cash up to the principal amount and shares of the Company’s common
stock in respect of any excess conversion amount. The initial
conversion rate for the notes is 46.8962 shares of common stock per
$1,000 principal amount of the notes, which is equal to a
conversion price of approximately $21.32 per share, representing a
29.0% conversion premium based on the closing price of the
Company’s common stock of $16.53 per share on April 10, 2012. The
notes mature on April 15, 2017.
In connection with the offering, the Company entered into
convertible note hedge transactions in respect of its common stock
with affiliates of the initial purchasers of the notes (the “option
counterparties”). These convertible note hedge transactions are
expected to reduce the potential dilution upon future conversion of
the notes. In addition, the Company entered into separate warrant
transactions with the option counterparties at a higher strike
price. The warrant transactions could separately have a dilutive
effect to the extent that the market value per share of the
Company’s common stock exceeds the applicable strike price of the
warrants. If the initial purchasers exercise their option to
purchase additional notes, the Company expects to enter into
additional convertible note hedge and warrant transactions with the
option counterparties.
The Company estimates that the net proceeds from this offering
will be approximately $193 million, after deducting the initial
purchasers’ discounts and the estimated offering expenses. The
Company expects to apply the net proceeds from the offering and the
sale of the warrants to fund the costs and expenses of the
convertible note hedge transactions, repay certain indebtedness and
for other general corporate purposes, which may include
acquisitions, investments and repurchases of Company common stock
from time to time pursuant to the Company’s previously announced
share repurchase program.
The Company has been advised that, in connection with
establishing their initial hedge of the convertible note hedge and
warrant transactions, the option counterparties and/or their
affiliates expect to purchase shares of the Company’s common stock
in open market transactions and/or privately negotiated
transactions and/or enter into various over-the-counter derivative
transactions with respect to shares of the Company’s common stock
in connection with the pricing of the notes. In addition, the
option counterparties and/or their affiliates may modify their
hedge positions by unwinding these derivative transactions,
entering into or unwinding additional over-the-counter derivative
transactions with respect to the Company’s common stock and/or
purchasing or selling shares of the Company’s common stock or other
of the Company’s securities in secondary market transactions from
time to time following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so during any
conversion period related to a conversion of notes). Any of these
hedging activities could have the effect of increasing, decreasing
or preventing a decline in the price of the Company’s common stock
or the notes at that time.
The notes and any shares of common stock of the Company that may
be issued upon conversion of the notes have not been registered
under the Securities Act or any state securities laws, and unless
so registered, may not be offered or sold in the United States
except pursuant to an exemption from the registration requirements
of the Securities Act and applicable state laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the notes or the shares of common
stock issuable upon conversion of the notes, nor shall there be any
sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or jurisdiction.
About DFC Global Corp.
DFC Global Corp. is a leading international diversified
financial services company serving primarily unbanked and
under-banked consumers who, for reasons of convenience and
accessibility, purchase some or all of their financial services
from the Company rather than from banks and other financial
institutions.
Forward-Looking Statement
This news release contains forward-looking statements, including
statements regarding the following: the offering of the notes, the
entry into the convertible note hedge transactions, the entry into
the warrant transactions, the impact of the convertible note hedge
transactions and the warrant transactions and the utility of the
convertible note hedge transactions and the warrant transactions.
These forward-looking statements involve risks and uncertainties,
including risks related to the regulatory environment, current and
potential future litigation, the integration of acquired stores,
the performance of new stores, the implementation and results of
restructuring initiatives, the impact of the note offering, the
convertible note hedge transactions and the warrant transactions
and the effects of new products and services on the Company’s
business, results of operations, financial condition, prospects and
guidance. There can be no assurance that the Company will attain
its expected results, successfully integrate any of its
acquisitions, attain its published guidance metrics, or that
ongoing and potential future litigation, the increase in interest
payments under the notes, or the various FDIC, Federal, state or
foreign legislative or regulatory activities affecting the Company
or the banks with which the Company does business will not
negatively impact the Company’s operations. A more complete
description of these and other risks, uncertainties and assumptions
is included in the Company’s filings with the Securities and
Exchange Commission, including those described under the heading
“Risk Factors” attached as an exhibit to the Company’s Current
Report on Form 8-K filed with the Securities and Exchange
Commission on April 9, 2012 and its Annual Report on Form 10-K for
the Company’s fiscal year ended June 30, 2011. You should not place
any undue reliance on any forward-looking statements. We disclaim
any obligation to update any such factors or to publicly announce
results of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
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