Cowen Group, Inc. (NASDAQ:COWN) (“Cowen” or the “Company”) today announced the closing of its previously announced private offering of $149.5 million aggregate principal amount of 3.0% cash convertible senior notes due 2019. The offering included $19.5 million aggregate principal amount of notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional notes.
Nomura Securities International, Inc. and Cowen and Company, LLC acted as book-running managers for the offering.
In connection with the pricing of the notes and the exercise of the initial purchasers’ option, the Company entered into a cash convertible note hedge transaction with an affiliate of Nomura Securities International, Inc. (the “Option Counterparty”). The Company also entered into warrant transactions with the Option Counterparty, and the related warrants have an exercise price that is 75% higher than the last reported sale price of $4.10 per share of the Company’s Class A common stock on March 4, 2014. The cash convertible note hedge transaction is expected to reduce the Company’s exposure to potential cash payments in excess of the principal amount of converted notes that the Company may be required to make upon conversion of the notes. The warrant transactions will separately have a dilutive effect to the extent that the market value per share of the Company’s Class A common stock exceeds the applicable strike price of the warrants.
The Option Counterparty or an affiliate thereof may modify its hedge position from time to time by entering into or unwinding various derivatives with respect to the Company’s Class A common stock and/or purchasing or selling the Company’s Class A common stock or other securities of the Company in secondary market transactions (and is likely to do so during any observation period related to a conversion of notes). This activity could cause or avoid an increase or a decrease in the market price of the Company’s Class A common stock.
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