New York, May 1 - Drillsearch Energy Ltd. priced $100 million of five-year senior convertible bonds to yield 6% with a 35% initial conversion premium.
The offering came at the cheap end of talk, which was for a coupon of 5% to 6% and an initial conversion premium of 35%.
"The successful completion of this raising significantly improves Drillsearch's balance sheet strength and helps Drillsearch achieve an optimal funding mix," the company's chairman, Jim McKerlie, said in a news release.
"We are very pleased with this result which we believe delivers longer term, debt style funding more aligned to the current maturity of Drillsearch's assets."
The Regulation S deal has a $25 million greenshoe and was sold primarily to investors in Asia and Europe via bookrunner Goldman Sachs with UBS AG Australia branch acting as a co-manager.
The notes are non-callable for one year and then provisionally callable if the company's shares reach 175% of the conversion price. After year three, the bonds are callable subject to a price hurdle of 130%.
The securities have takeover and dividend protection.
Proceeds will be used to repay a A$100 million debt facility provided by the Commonwealth Bank of Australia to fund the acquisition of Acer Energy Ltd. and for general corporate purposes.
Sydney, Australia-based Drillsearch is an oil and gas exploration, development and production company.
| Issuer: | Drillsearch (Finance) Pty. Ltd.
|
| Guarantor: | Drillsearch Energy Ltd.
|
| Issue: | Senior guaranteed convertible bonds
|
| Amount: | $100 million
|
| Greenshoe: | $25 million
|
| Maturity: | Sept. 1, 2018
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Initial conversion premium: | 35%
|
| Initial conversion price: | $1.66
|
| Call: | After one year subject to 175% hurdle, after three years subject to 130% hurdle
|
| Bookrunner: | Goldman Sachs
|
| Co-manager: | UBS AG Australia
|
| Pricing date: | April 30
|
| Settlement: | May 3
|
| Distribution: | Regulation S
|
| Stock symbol: | ASX: DLS
|
| Stock price: | A$1.19 at close on April 26 (stock halted)
|
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