INTL FCStone to Raise $350 Million in Private Notes Offering

The firm plans to use proceeds and cash on hand to fund GAIN capital deal

Cross-border payments provider INTL FCStone today unveiled that it intends to offer, subject to market conditions and other factors, $350 million in aggregate principal amount of Senior Secured Notes due 2025 (the “Notes”).

The firm said that the Notes and the related Note guarantees would be offered in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain persons outside the United States pursuant to Regulation S under the Securities Act.

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The company plans to use the net proceeds from the sale of the Notes, together with cash on hand, to (1) fund the cash consideration for the merger of INTL FCStone wholly-owned subsidiary and GAIN Capital Holdings, with GAIN surviving as the company’s wholly-owned subsidiary, pursuant to the Agreement and Plan of Merger dated as of February 26, 2020 (the “Merger”), (2) fund the repayment of GAIN’s 5.00% Convertible Senior Notes due 2022 and (3) pay certain related transaction fees and expenses.

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Escrow conditions

INTL FCStone intends to deposit the gross proceeds of the offering into a segregated escrow account until the date that certain escrow release conditions are satisfied. Among other things, the escrow conditions include the consummation of the merger. The Notes are expected to pay interest semi-annually in arrears.

Under the agreement, INTL FC Stone will acquire GAIN in an all-cash transaction. GAIN’s stockholders will receive $6.00 per share, representing approximately $236 million in equity value.

INTL FC Stone highlights that the announcement is neither an offer to sell nor a solicitation of an offer to buy the Notes, the related guarantees or any other security, nor shall there be any offer, solicitation or sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. Any offers of the Notes and the related guarantees will be made only by means of a private offering memorandum.

The firm noted that the offer and sale of the Notes and related guarantees have not been, and will not be, registered under the Securities Act, or the securities laws of any other jurisdiction, and the Notes and related guarantees may not be offered or sold in the United States absent registration or applicable exemptions from registration requirements.

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