GAIN Capital (NYSE:GCAP) has just announced that it is preparing to offer a new batch of convertible senior notes. The brokerage is going to offer $80 million worth of paper with an additional 30 day option for another $12 million to cover potential over-allotments.
The sale is going to refinance existing obligations and provide for a $15 million buyback program. The notes will be convertible at the option of holders until the 15th of April 2022.
GAIN Capital’s (NYSE:GCAP) new debt issue will also be used to relay existing obligations and add to the broker’s balance sheet as it looks for “strategic acquisitions” and additional share buybacks. The company has hired JPMorgan and Jefferies as joint book-running managers of the offering.
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As of the end of the second quarter of 2017, GAIN Capital (NYSE:GCAP) reported that the company’s total liquidity amounts to $135.8 million.
GAIN Capital has conservatively retained excess capital over the regulatory requirements and recently obtained a revolving credit facility worth $50 million.
The company has successfully completed and integrated 10 acquisitions over the past 5 years and has been consistently returning money to shareholders in recent quarters.
Recent quarters have been difficult for GAIN Capital’s (NYSE:GCAP) arch rival listed in the US, FXCM (NASDAQ:FXCM). The company recently announced the closure of the sale of its stake in Fastmatch to Euronext. FXCM still owes Leucadia National $66.8 million. Speculation about the company’s future as a listed company has been ramping up in recent months.
Earlier this year GAIN Capital (NYSE:GCAP) purchased FXCM’s US accounts.