StoneX launches $625M notes ahead of merger to fund R.J. O’Brien acquisition, with escrowed proceeds and guarantees.
StoneX launches $625M notes ahead of merger to fund R.J. O’Brien acquisition, with escrowed proceeds and guarantees.
StoneX launches $625M notes through its wholly-owned subsidiary, StoneX Escrow Issuer LLC, announcing an offering of $625 million in aggregate principal amount of Senior Secured Notes due 2032. This private offering, depending on market conditions and other factors, will target qualified institutional buyers under Rule 144A of the Securities Act of 1933 and certain non-U.S. persons by Regulation S.
StoneX will hold the proceeds from this offering in a segregated escrow account until it meets specific conditions for release. Notably, StoneX created the issuing subsidiary solely for this transaction related to its planned acquisition of R.J. O’Brien (RJO). Following the successful closure of the acquisition, StoneX will merge StoneX Escrow Issuer LLC into the parent company, release the funds held in escrow, and assume all obligations under the Notes.
Moreover, the company plans to use the released proceeds, combined with its existing cash, to cover the purchase price of the acquisition along with related fees, premiums, and expenses. Before the merger finalizes, the company will provide no guarantees on the Notes and will secure them only with a senior secured first priority lien on the escrowed proceeds.
However, upon completion of the deal, the Notes will receive full, unconditional guarantees from StoneX’s existing and future subsidiaries that also back the firm’s senior secured revolving credit facility and other senior debt. In addition, these guarantees are subject to release under certain defined circumstances, offering added flexibility.
Once the merger is completed, StoneX will secure the Notes and their guarantees with second-priority liens on most of its own and the guarantors’ assets and property, allowing for certain exceptions and permitted liens. StoneX expects the Notes to bear interest, which it will pay semi-annually in arrears, aligning with industry norms and investor expectations.
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