Why Vector Group (VGR) Is Lower on Wednesday

NEW YORK (TheStreet) -- Vector Group (VGR) is trading lower on Wednesday after pricing its offering of convertible debt.

By midday, shares had tumbled 6.2% to $20.39. Trading volume of 3.2 million was nearly triple its three-month daily average.

The tobacconist said it would offer $225 million worth of its variable interest convertible senior notes due 2020. Vector Group will offer also offer up to an aggregate of $258.8 million if the underwriter, Jefferies, accepts its over-allotment option in full. The senior notes will offer cash interest at a rate of 1.75% a year.

The offering is expected to close March 24, pursuant to customary closing conditions.

The Miami-based business intends to use the net proceeds of the offering for general corporate purposes, including real estate investments. A portion of capital raised may also be used in upcoming debt maturities.

Must Read: Warren Buffett's 10 Favorite Dividend Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings team rates VECTOR GROUP LTD as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate VECTOR GROUP LTD (VGR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and compelling growth in net income. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."

If you liked this article you might like

Tobacco Stocks Mixed as FDA Launches Campaign to Keep Kids Away From E-Cigarettes

Don't Buy Altria's Dip Following FDA Regulation Change, RBC Says

Tobacco Stocks Go Up in Smoke After FDA Issues Plan to Curb Tobacco-Related Deaths

Top 5 Dividend Paying Companies in the Challenged Consumer Goods Sector

Home Depot, Federal Realty, more: 'Mad Money' Lightning Round