(NASDAQ:DLLR — News) 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 intends to offer, subject to market conditions and other factors, up to $200 million aggregate principal amount of senior convertible notes due 2017 in a private offering. The notes will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933. The Company also intends to grant the initial purchasers an option to purchase up to an additional $30 million aggregate principal amount of notes.
The notes will be unsecured, senior obligations of the Company and will pay interest semi-annually. 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 interest rate, conversion rate and other terms will be determined by negotiations between the Company and the initial purchasers of the notes.
In connection with the offering, the Company expects to enter into convertible note hedge transactions in respect of its common stock with one or more 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 expects to enter 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.
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