GAIN To Issue $65 million Convertible Note In a Bid to Raise Funds

Leading online FX and CFD trading provider, GAIN Capital (GAIN), has announced that it intends to offer a $65 million aggregate principal of its convertible senior notes due 2018 to qualified institutional investors, subject to regulatory approval. The listed firm, headquartered in Bedminster, New Jersey will use the proceeds to repay debt and use the capital for potential acquisitions.

GAIN Capital’s announcement comes a day after arch rival, FXCM, made a press release about changes in its credit facility. Both convertible notes and credit facility are signs of a firm's intention to either pay debt or raise cash for strategic growth and development. The two US giants have both been involved in acquisitions this year, GAIN purchased GFT and FXCM made a string of purchases with Faros and Infinium Note.

The official press briefing outlines details of the issuance made by GAIN, it states: “The notes will be unsecured, senior Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term of GAIN Capital, and interest will be payable semi-annually. The notes will be convertible at any time prior to the close of business on the business day immediately preceding June 1, 2018 only upon the occurrence of specified events; thereafter, until the close of business on the business day immediately preceding the maturity date of December 1, 2018, the notes will be convertible at any time.”

Convertible notes (bonds or debt) are issued by firms as they give investors the option to convert the debt into shares. In addition they have numerous advantages for investors including; offering a higher Yield Yield A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a Read this Term than those obtainable on the shares into which the bonds convert. The debt instruments have an element of safety as they provide asset protection, on the upside there are possibilities of high equity-like returns.

Corporate debt is commonly issued by firms in financial markets, in 2009 ETrade issued a $1 billion senior note after suffering on the back of mortgage back securities. Earlier this year in May, FXCM issued debt valued at $125 million.

News of the debt issuance was taken negatively by the market as shares for GAIN opened lower on Thursday and are currently trading down 15% to $9.01.