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EZCORP INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement

July 8, 2014

Item 1.01 - Entry into a Material Definitive Agreement Issuance of Additional Notes On July 2, 2014, EZCORP, Inc. (the "Company") issued an additional $30 million principal amount of its 2.125% Cash Convertible Senior Notes due 2019 (the "Additional Notes") to Morgan Stanley & Co. LLC, UBS Securities, LLC and Jefferies LLC (the "Initial Purchasers") for resale to certain qualified institutional buyers in compliance with Rule 144A under the Securities Act of 1933. The issuance was pursuant to the Initial Purchasers' exercise of their option to purchase the Additional Notes. The Additional Notes have the same terms as, and are issued under the same indenture as, the $200 million aggregate principal amount of notes the Company issued on June 23, 2014, that are described in the Company's Current Report on Form 8-K dated June 17, 2014. The Cash Convertible Note Hedge and Warrant Transactions On June 27, 2014, which is the date the Initial Purchasers gave notice that they were exercising their option to purchase the Additional Notes, the Company entered into privately negotiated cash convertible note hedge transactions (collectively, the "Cash Convertible Note Hedge Transactions") with each of Morgan Stanley & Co. LLC., as agent for Morgan Stanley & Co. International plc, Jefferies International Limited and UBS AG, London Branch, (the "Option Counterparties"), relating to the notional number of shares of the Company's Class A common stock underlying the Additional Notes. The Company also entered into privately negotiated warrant transactions (collectively, the "Warrant Transactions") relating to the Class A common stock with each of the Option Counterparties, pursuant to which the Company may be obligated to issue shares of Class A common stock. The Cash Convertible Note Hedge Transactions were funded by the Company out of the net proceeds of the issuance of the Additional Notes. The net cost to the Company of the Cash Convertible Note Hedge Transactions and the Warrant Transactions was $2.8 million. 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 Notes. The Warrant Transactions could have a dilutive effect to the extent that the market price per share of the Class A common stock exceeds the strike price of the relevant warrants, which is initially $20.825 per share. In connection with establishing their initial hedge of the Cash Convertible Note Hedge Transactions and the Warrant Transactions, the Option Counterparties and/or their affiliates expect to purchase shares of the Company's Class A common stock and/or enter into various derivative transactions with respect to Class A common stock. This activity could increase (or reduce the size of any decrease in) the market price of Class A common stock or the Notes at that time. In addition, the Option Counterparties and/or their affiliates may modify their hedge position by entering into or unwinding various derivatives with respect to Class A common stock and/or purchasing or selling Class A common stock in secondary market transactions prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of the Notes or following any repurchase of the Notes by the Company pursuant to the terms of the Notes or otherwise). This activity could also cause a decrease or avoid an increase in the market price of Class A common stock or the Notes. The Cash Convertible Note Hedge Transactions and the Warrant Transactions are separate transactions each entered into by the Company with the Option Counterparties, are not part of the terms of the Notes and will not change any holders' rights under the Notes. Holders of the Notes will not have any rights with respect to the Cash Convertible Note Hedge Transactions or Warrant Transactions. The Cash Convertible Note Hedge Transactions and the Warrant Transactions were terminable if the Company did not issue the Additional Notes and pay the premiums for the Cash Convertible Note Hedge Transactions on July 2, 2014. Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant The information under Item 1.01 is incorporated herein by reference. Item 3.02 - Unregistered Sales of Equity Securities The information under Item 1.01 is incorporated herein by reference.


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Source: Edgar Glimpses


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