E-Trade seeks regulatory nod to issue stocks to finance OptionsHouse deal

E-Trade seeks regulatory nod to issue stocks to finance OptionsHouse deal

Do not invest more money than you can afford to lose.


Multi-asset brokerage E-Trade Financial Corp. (NASDAQ:ETFC), operating under the E-Trade brand, filed on Monday a prospectus supplement with the Securities and Exchange Commission (SEC) relating to the offering of up to $400 million in preferred stock with a liquidation preference of $1,000 per share, the company said in a statement.

The actual terms of the securities, including the dividend rate, issuance amount, and redemption provisions, are yet to be determined and will depend on market conditions at the time of pricing.

As SMN Weekly has already informed you, the company will use the proceeds it would raise from the stock sale, along with $325 million of existing cash, to finance the purchase of Aperture New Holdings, Inc., the ultimate parent company of OptionsHouse. The deal is expexted to be finalized in the fourth quarter of 2016.

E-Trade said it has filed an effective registration statement, including a preliminary prospectus supplement and accompanying base prospectus. It also added that it has appointed Credit Suisse, Goldman, Sachs & Co., J.P. Morgan, and Morgan Stanley as joint bookrunners for the share issue.

New York-based E-Trade Financial Corp., offers various financial services, online brokerage and banking services. It works primarily with retail clients through its 30 offices across the US.

The holding company has three subsidiaries – E-Trade Securities for securities products and services, including stocks, bonds mutual funds, options, and ETFs; E-Trade Capital Management for managed account solutions; and E-Trade Bank for bank products and services.

OptionsHouse is an indirect subsidiary of Aperture New Holdings and is based in Chicago. Currently it has 154,000 customer accounts with $3.6 billion in customer assets, including $1.4 billion in cash. In the 12 months that ended June 30, 2016, OptionsHouse executed 27 000 Daily Average Trades (DARTs). Of them 63% were in options. Besides options, the full-suite investment products portfolio includes equities and futures.

You can read E-Trade’s full filing with the SEC here.

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