Cowen Group, Inc. to Offer $125 Million of Cash Convertible Senior Notes

NEW YORK–(BUSINESS WIRE)–Mar. 3, 2014–
Cowen Group, Inc. (NASDAQ:COWN) (“Cowen” or the “Company”) today
announced that it intends to offer, subject to market and other
conditions, $125 million aggregate principal amount of cash convertible
senior notes due 2019 to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933, as amended. The Company also
expects to grant a 30-day option to the initial purchasers to purchase
up to $18.75 million aggregate principal amount of additional notes on
the same terms and conditions.

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

The interest rate, conversion rate and other terms of the notes will be
determined at the time of pricing of the offering. When issued, the
notes will be unsecured senior obligations of Cowen. The Company expects
to pay interest on the notes semi-annually on March 15 and September 15
of each year, commencing September 15, 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. 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. 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.

In connection with the pricing of the notes, the Company expects to
enter into a cash convertible note hedge transaction with an affiliate
of Nomura Securities International, Inc. (the “Option Counterparty”).
The Company also expects to enter into a warrant transaction with the
Option Counterparty. 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.

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 following the pricing of the notes 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 expects to use up a portion of the net proceeds from this
offering to pay the cost of the convertible note hedge transaction
(after such cost is partially offset by proceeds from the sale of the
warrants). If the initial purchasers exercise their option to purchase
additional notes, the Company may sell additional warrants and use a
portion of the proceeds from the sale of the additional notes, together
with the proceeds from the sale of the additional warrants, to increase
the size of the convertible note hedge transaction.

The Company expects to use up to $15 million 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.

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

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