(NASDAQ: DLLR) - 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 has priced $200 million aggregate principal amount of 3.25% senior convertible notes due 2017. The notes will be sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Subject to customary conditions, the sale is expected to close on April 16, 2012. The Company has granted to the initial purchasers of the notes the right to purchase up to an additional $30 million aggregate principal amount of notes solely to cover overallotments.
The notes will be unsecured, senior obligations of the Company and will pay interest semi-annually at a rate of 3.25%. 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 initial conversion rate for the notes is 46.8962 shares of common stock per $1,000 principal amount of the notes, which is equal to a conversion price of approximately $21.32 per share, representing a 29.0% conversion premium based on the closing price of the Company’s common stock of $16.53 per share on April 10, 2012. The notes mature on April 15, 2017.
In connection with the offering, the Company entered into convertible note hedge transactions in respect of its common stock with 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 entered 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.