Cowen Inc. announced the pricing of an offering of $120 million of 3.00% convertible senior notes due 2022.
The company also granted the initial purchasers of the notes an option to purchase up to $15 million of additional notes on the same terms and conditions. The offering is expected to close on Dec. 14, subject to customary closing conditions.
Interest will be payable on the notes semiannually at an annual rate of 3.00% on June 15 and Dec. 15 of each year, commencing June 15, 2018. The notes will mature on Dec. 15, 2022, unless earlier repurchased, redeemed or converted prior to such date. The notes will be convertible only under certain conditions prior to Sept. 15, 2022, and anytime thereafter until the close of business on the second business day immediately preceding the maturity date. Conversions will be settled by the delivery and/or payment of class A common stock, cash, or a combination of cash and stock.
Cowen will not have the right to redeem the notes prior to Dec. 15, 2020, and thereafter may only redeem the notes under certain conditions. The conversion rate for the notes will initially be 57.5540 shares of Cowen's class A common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $17.375 per class A common share.
The company estimates net proceeds from the offering of approximately $116.4 million, or $130.95 million if the initial purchasers' option to purchase additional notes is exercised in full, after deducting the initial purchasers' discounts and commissions but prior to taking into account any estimated offering expenses payable by the company. The expected offering expenses payable by the company are $600,000.
Cowen intends to use the net proceeds, together with cash on hand, from the offering for general corporate purposes, including the repurchase or repayment of $115.1 million of its outstanding 3.0% cash convertible senior notes due 2019 and the repurchase of approximately $19.5 million of its class A common shares from purchasers of the notes in privately negotiated transactions, which are expected to be consummated substantially concurrently with closing of the offering.
