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Cowen Group, Inc. Prices Offering of $130 Million 3.0% Cash Convertible Senior Notes Due 2019

NEW YORK–(BUSINESS WIRE)–Mar. 4, 2014–
Cowen Group, Inc. (NASDAQ:COWN) (“Cowen” or the “Company”) today
announced the pricing of its offering of $130 million aggregate
principal amount of 3.0% cash convertible senior notes due 2019. The
notes are being offered and sold to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended. The
Company also granted the initial purchasers of the notes an option to
purchase up to an additional $19.5 million aggregate principal amount of
notes on the same terms and conditions. The offering is expected to
close on March 10, 2014, subject to customary closing conditions.

Interest will be payable on the notes semi-annually at a rate of 3.0%
percent per annum on March 15 and September 15 of each year, commencing
September 15, 2014. Prior to September 15, 2018, the notes will be
convertible solely into cash under certain conditions and during certain
periods based on the value of the Company’s Class A common stock. On or
after September 15, 2018, the notes will be convertible solely into cash
without regard to such conditions. The conversion rate for the notes
will initially be 187.6173 shares of Cowen’s Class A common stock per
$1,000 principal amount of notes, which is equivalent to an initial
conversion price of approximately $5.33 per share of Cowen’s Class A
common stock. The initial conversion price of the notes represents a
premium of approximately 30% to the $4.10 per share last reported sale
price of Cowen’s Class A common stock on March 4, 2014. The notes will
mature on March 15, 2019, unless earlier repurchased or converted into
cash in accordance with their terms prior to such date. The notes will
not be convertible into Cowen’s Class A common stock or any other
security under any circumstances. The Company will not have the right to
redeem the notes prior to maturity. When issued, the notes will be
unsecured obligations of Cowen.

In connection with the pricing of the notes, the Company entered into a
cash convertible note hedge transaction with an affiliate of Nomura
Securities International, Inc.
(the “Option Counterparty”). The Company
also entered into a warrant transaction with the Option Counterparty,
and the related warrants have an exercise price that is 75% higher than
the last reported sale price per share of the Company’s Class A common
stock on March 4, 2014. The cash convertible note hedge transaction is
expected to reduce the Company’s exposure to potential cash payments in
excess of the principal amount of converted notes that the Company may
be required to make upon conversion of the notes. The warrant
transaction will separately have a dilutive effect to the extent that
the market value per share of the Company’s Class A common stock exceeds
the applicable strike price of the warrants. If the initial purchasers
exercise their option to purchase additional notes, the Company intends
to increase the size of the cash convertible note hedge and to enter
into an additional warrant transaction.

Nomura Securities International, Inc. and Cowen and Company, LLC are
acting as book-running managers for the offering.

In connection with establishing its initial hedge of the cash
convertible note hedge and warrant transactions, the Option Counterparty
or an affiliate thereof expects to purchase shares of the Company’s
Class A common stock and/or enter into various derivative transactions
with respect to the Company’s Class A 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 the Company’s
Class A common stock at that time.

In addition, the Option Counterparty or an affiliate thereof may modify
its hedge position from time to time by entering into or unwinding
various derivatives with respect to the Company’s Class A common stock
and/or purchasing or selling the Company’s Class A common stock or other
securities of the Company in secondary market transactions (and is
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 the Company’s Class A common stock.

The Company estimates that the net proceeds of the offering will be
$126.7 million (or $145.8 million if the initial purchasers’ option to
purchase additional notes is exercised in full), after deducting the
initial purchasers’ discounts and commissions (other than Cowen and
Company’s discounts and commissions) and estimated offering expenses.

The Company expects to use approximately $17.8 million of the net
proceeds from this offering to pay the cost of the cash convertible note
hedge transaction (after such cost is partially offset by proceeds from
the sale of the warrants).

The Company expects to use approximately $340,000 of the net proceeds of
the offering to repurchase shares of its Class A common stock from
purchasers of the notes in privately negotiated transactions, which are
expected to be consummated substantially concurrently with closing of
the offering. The price of the Class A common stock repurchased in these
transactions is expected to equal the closing price per share of the
Company’s Class A common stock on the date of the pricing of the
offering. Repurchases of shares of the Company’s Class A common stock
could increase, or prevent a decrease in, the market price of the
Company’s Class A common stock or the notes. In the case of repurchases
effected concurrently with this offering, this activity could affect the
market price of the Company’s Class A common stock concurrently with the
pricing of the notes, and could result in a higher effective conversion
price for the notes.

The Company intends to apply the remaining net proceeds from the sale of
the notes for general corporate purposes.

This press release does not constitute an offer to sell or the
solicitation of an offer to buy the notes or any other securities, nor
will there be any sale of notes or any other securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such state or jurisdiction.

The offer and sale of the notes have not been registered under the
Securities Act of 1933, as amended, or any state securities laws and may
not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.

About Cowen Group, Inc.

Cowen Group, Inc. is a diversified financial services firm and, together
with its consolidated subsidiaries, provides alternative asset
management, investment banking, research, and sales and trading services
through its two business segments: Ramius and its affiliates makes up
the Company’s alternative investment segment, while Cowen and Company
and its affiliates make up the Company’s broker-dealer segment. Ramius
provides alternative asset management solutions to a global client base
and manages a significant portion of Cowen’s proprietary capital. Cowen
and Company
and its affiliates offer industry focused investment banking
for growth-oriented companies, domain knowledge-driven research and a
sales and trading platform for institutional investors. Founded in 1918,
the firm is headquartered in New York and has offices located in major
financial centers around the world.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking
statements provide the Company’s current expectations or forecasts of
future events. Forward-looking statements include statements about the
Company’s expectations, beliefs, plans, objectives, intentions,
assumptions and other statements that are not historical facts.
Forward-looking statements are subject to known and unknown risks and
uncertainties and are based on potentially inaccurate assumptions that
could cause actual results to differ materially from those expected or
implied by the forward-looking statements, including without limitation,
whether or not the Company will offer the notes or consummate the
offering, enter into the convertible note hedge transactions or the
separate warrant transactions, the anticipated terms of the notes and
the offering, and the anticipated use of the proceeds of the offering.
The Company’s actual results could differ materially from those
anticipated in forward-looking statements for many reasons, including
the factors described in the section entitled “Risk Factors” in the
Company’s Annual Report on Form 10-K and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the
Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
as filed with the Securities and Exchange Commission. The Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q are available at our
website at www.cowen.com
and at the Securities and Exchange Commission website at www.sec.gov.
Unless required by law, the Company undertakes no obligation to publicly
update or revise any forward-looking statement to reflect circumstances
or events after the date of this press release.

Source: Cowen Group, Inc.

Cowen Group, Inc.
Stephen Lasota, 212-845-7919