DFC Global pulls high-yield deal after lawsuit

Fri Nov 22, 2013 12:39pm EST
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By Natalie Harrison and Robert Smith

NEW YORK/LONDON, Nov 22 (IFR) - The high-yield market ended on a down note on Friday after pawn broker DFC Global pulled a USD650m-equivalent bond offering.

The company blamed market conditions, even though deals have been flying off the shelf this week with more than USD6bn-worth of deals pricing in the US market alone - and some observers said it was more to do with a lawsuit filed on Thursday.

"It's an absolute joke that they cited market conditions given how buoyant the market is," said one syndicate banker.

An investor said: "It didn't sound as if it was going very well, and this just added fuel to the fire."

The lawsuit, filed by Brower Piven on behalf of some purchasers of DFC Global common stock, alleges violations of securities laws regarding disclosures in an SEC filing.

DFC Global shares were down more than 11% at mid-session on Friday.

Although lawsuits like this are fairly common in the US, they are less frequent in Europe - and the announcement may have unnerved investors in the region.

A second banker said the leads may have been too optimistic about how well the deal would sell in Canada, which is still a relatively small high-yield market.   Continued...