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EZCORP Announces Pricing Of Private Offering Of $200 Million Of Cash Convertible Senior Notes

Stocks in this article: EZPW

AUSTIN, Texas, June 18, 2014 (GLOBE NEWSWIRE) -- EZCORP, Inc. (Nasdaq:EZPW) (the "Company") announced today the pricing of its $200 million aggregate principal amount of cash convertible senior notes due 2019 (the "Convertible Notes"). The Convertible Notes were offered in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Company granted an option to the initial purchasers for up to an additional $30 million aggregate principal amount of Convertible Notes. The Convertible Notes will pay interest semiannually at an annual rate of 2.125% and will be convertible solely into cash based on the applicable conversion rate at such time. The Convertible Notes have an initial conversion rate of 62.2471 shares of the Company's Class A Non-Voting Common Stock ("Class A common stock") per $1,000 principal amount of the Convertible Notes (which is equal to an initial conversion price of approximately $16.065 per share of the Company's Class A common stock), representing an initial conversion premium of approximately 35% above the closing price of $11.90 per share of the Company's Class A common stock on June 17, 2014. The conversion rate is subject to adjustment in certain circumstances. The Convertible Notes will mature on June 15, 2019, unless earlier repurchased or converted in accordance with their terms prior to such date. Prior to December 15, 2018, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

In connection with the pricing of the Convertible Notes, the Company entered into privately negotiated cash convertible note hedge transactions with certain of the initial purchasers or their affiliates (in this capacity, the "option counterparties"). The cash convertible note hedge transactions cover, subject to customary anti-dilution adjustments, the number of shares of Class A common stock underlying the Convertible Notes sold in the offering. The Company also entered into separate, privately negotiated warrant transactions with the option counterparties relating to the same number of shares of the Company's Class A common stock, subject to customary anti-dilution adjustments, with an initial strike price of approximately $20.825 per share, subject to certain adjustments, which is approximately 75% higher than the closing price of the Company's common stock on June 17, 2014. If the initial purchasers exercise their option to purchase additional Convertible Notes, the Company intends to enter into additional warrant transactions with the option counterparties and use a portion of the net proceeds from the sale of such additional Convertible Notes, together with the proceeds from the sale of the additional warrants, to increase the size of the cash convertible note hedge transactions. The cash convertible note hedge transactions are expected generally to offset any cash payments the Company is required to make in excess of the principal amount of converted notes upon any conversion of the Convertible Notes. The Company expects that to the extent that the market price per share of the Company's Class A common stock exceeds the strike price of the warrants, the warrant transactions could have a dilutive effect with respect to the Company's Class A common stock.

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