NEW YORK Feb 24 Knight Capital Group,
which recently agreed to be bought for $1.4 billion by Getco
Holding Co, has struck a deal to sell its credit-brokerage unit
to Stifel Financial Corp, according to a person familiar
with the matter.
The terms of the deal were not known. But Stifel will be
picking up investment-grade, high-yield, asset-backed and
mortgage-backed debt brokers in the U.S. and Europe through the
deal the source said.
The deal could be announced as soon as Monday, according to
the source, who spoke on the condition of anonymity because the
sale has not yet been made public. The news was previously
reported by Bloomberg News earlier on Sunday.
Bank of America advised Knight Capital on the sale,
the source said.
Knight Capital declined to comment on the sale. Stifel,
Getco and Bank of America could not be immediately reached for
Knight is a top U.S. market maker, using computer models to
match buy and sell orders in stocks and options, executing
around 10 percent of U.S. equity trading volume. Getco also has
market making operations, and is one of the biggest
high-frequency trading firms.
The company was forced to take on additional investors and
re-examine its entire business following a software problem in
August that led to millions of unintentional orders flooding
into the market over a 45-minute period, leaving Knight with a
huge position it had to unload at a loss of $461.1 million.
Following the glitch, Knight secured $400 million in rescue
financing - in exchange for a more than 70 percent stake in the
company - from a group of investors that included Chicago-based
Getco and was led by Jefferies Group Inc.
Jefferies later helped finance Getco's proposed acquisition
of Knight, which is expected to close in the first half of 2013.