Markets

Financial Stocks Now Pacing Market Advance; Gain Capital Tumbles 20% on Plans for $65-Mln Private Placement

Top Financial Stocks

JPM +1.85%

BAC +2.25%

WFC +1.26%

C +2.09%

USB +0.26%

Financial stocks are broadly higher, with the NYSE Financial Sector Index advancing 0.9% and the S&P Financial 100 Index climbing 1.3%.

In company news, Gain Capital Holdings Inc. ( GCAP ) is down nearly 20% at $8.54 a share, just 3 cents above its intra-day low after late Wednesday announcing plans for a $65-million private placement of convertible senior notes due 2018.

The brokerage said it also expects to grant 30-day options to the unidentified initial purchasers to purchase up to $10 million in additional notes to cover possible overallotments.

Net proceeds from the private placement are slated to repay a $33.2-million seller note and for general corporate purposes, including potential strategic acquisitions.

According to the company, repayment of the seller note - while lowering the company's annual interest costs by around $100,000 and boosting its tax benefit - will increase its amortization expense by $1.8 million and reduce its yearly earnings by $0.03 per share.

Final terms of the notes, including the interest rate and the initial conversion rate, will be negotiated with buyers of the notes.

In other sector news,

(+) OPY, (+2.7%) Completes purchase of selected assets from Greencrest Capital, which will form the company's new Private Shares unit providing liquidity for privately held companies and their shareholders, including venture capital firms and angel investors.

(-) FOR, (-6.6%) Selling 5.4 mln tangible equity units in underwritten offering, The real estate developer also expects to offer 30-day options to underwriters to purchase up to 600,000 more units to cover possible overallotments.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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