JERSEY CITY, N.J., March 15 /PRNewswire-FirstCall/ -- Knight
Capital Group, Inc. (Nasdaq: NITE) today announced that it
intends to privately offer, subject to market and other conditions,
$300 million aggregate principal
amount of cash convertible senior subordinated notes due 2015.
Knight also expects to grant the initial purchasers of the notes an
option to purchase up to an additional $45
million aggregate principal amount of notes, solely to cover
over-allotments, if any. The notes will be offered only to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act").
The notes will pay interest semi-annually on March 15 and September
15, and the notes will mature on March 15, 2015. Prior to December 15, 2014, the notes will be convertible
into cash only upon specified events and, thereafter, at any time.
Upon cash conversion, Knight will deliver an amount of cash
calculated over the applicable observation period. Knight will not
deliver common stock (or any other securities) upon conversion
under any circumstances. The interest rate, conversion price and
other financial terms will be determined by negotiations between
Knight and the initial purchasers.
In connection with the pricing of the notes, Knight intends to
enter into privately negotiated cash convertible note hedge
transactions with one or more affiliates of the initial purchasers
of the notes or other financial institutions (the "option
counterparties") that are expected generally to reduce Knight's
exposure to potential cash payments in excess of the principal
amount of the notes that may be required to be made by Knight upon
the cash conversion of the notes. Knight also intends to enter into
privately negotiated warrant transactions with the option
counterparties, which could have a dilutive effect to the extent
that the price of Knight common stock exceeds the applicable strike
price of the warrants. Knight may, however, elect to settle
the warrants in cash, subject to certain conditions. If the
initial purchasers exercise their over-allotment option, Knight may
enter into additional cash convertible note hedge transactions and
additional warrant transactions.
In connection with establishing their initial hedge of the cash
convertible note hedge and warrant transactions, the option
counterparties or their affiliates expect to enter into various
derivative transactions with respect to Knight common stock
concurrently with or shortly after the pricing of the notes. This
activity could increase (or reduce the size of any decrease in) the
market price of Knight common stock at that time. In addition, the
option counterparties or their affiliates may modify their hedge
positions by entering into or unwinding various derivatives with
respect to Knight common stock and/or purchasing or selling Knight
common stock in secondary market transactions following the pricing
of the notes and prior to the maturity of the notes (and are likely
to do so during any observation period related to a conversion of
notes). This activity could also cause or avoid an increase or a
decrease in the market price of Knight common stock.
Knight intends to use the net proceeds to pay the costs of the
cash convertible note hedge transactions described above (after
such costs are offset by the proceeds to Knight from the warrant
transactions described above) and to retire debt of $140 million in a senior secured term loan
facility and senior secured revolving facility. The remainder of
the net proceeds will be used for general corporate purposes.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities. The notes have not
been, and will not be, registered under the Securities Act or the
securities laws of any other jurisdiction and may not be offered or
sold in the United States absent
registration or an applicable exemption from registration
requirements. The notes are being offered only to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act.
About Knight
Knight Capital Group, Inc. (Nasdaq: NITE) is a global financial
services firm that provides market access and trade execution
services across multiple asset classes to buy- and sell-side firms.
Knight's hybrid market model features complementary electronic and
voice trade execution services in global equities and fixed income
as well as foreign exchange, futures and options. The firm is
consistently ranked as the leading source of off-exchange liquidity
in U.S. equities. Knight also provides capital markets services to
corporate issuers. Knight is headquartered in Jersey City, NJ with a growing global presence
across North America, Europe and the Asia-Pacific region.
Certain statements contained herein may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are not historical facts and are based on current
expectations, estimates and projections about the Company's
industry, management's beliefs and certain assumptions made by
management, many of which, by their nature, are inherently
uncertain and beyond our control. Accordingly, readers are
cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict
including, without limitation, risks associated with changes in
market structure, legislative or regulatory rule changes, the
costs, integration, performance and operation of businesses
recently acquired or developed organically, or that may be acquired
in the future, by the Company and risks related to the costs and
expenses associated with the Company's exit from the Asset
Management business. Since such statements involve risks and
uncertainties, the actual results and performance of the Company
may turn out to be materially different from the results expressed
or implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Unless otherwise required by law,
the Company also disclaims any obligation to update its view of any
such risks or uncertainties or to announce publicly the result of
any revisions to the forward-looking statements made herein.
Readers should carefully review the risks and uncertainties
disclosed in the Company's reports with the U.S. Securities and
Exchange Commission (SEC), including, without limitation, those
detailed under the headings "Certain Factors Affecting Results of
Operations" and "Risk Factors" in the Company's Annual Report on
Form 10-K for the year-ended December 31,
2009, and in other reports or documents the Company files
with, or furnishes to, the SEC from time to time. This information
should also be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto contained in the
Company's Annual Report on Form 10-K for the year-ended
December 31, 2009, and in other
reports or documents the Company files with, or furnishes to, the
SEC from time to time.
SOURCE Knight Capital Group, Inc.