Deerfield seeks $25 million; RXi plans placement; Macarthur to issue stock; Cream upsizes deal

By Stephanie N. Rotondo

Portland, Ore., March 23 - More U.S.-based issuers entered the PIPE market Tuesday, breaking up the recent trend of Canadian dominance.

Deerfield Capital Corp. announced a $25 million private placement of convertible notes with a single investor. The company is raising the funds in an effort to retire existing debt.

Meanwhile, RXi Pharmaceuticals Corp. said it would conduct a registered direct offering of units to raise $16.2 million. The proceeds will be used, in part, to repurchase some stock.

Among Canadian issuers, Macarthur Minerals Ltd. has arranged a C$9 million private placement of stock. Cream Minerals Ltd. meantime said it had increased a previously announced private placement of units. The company now intends to raise C$1.64 million.

Deerfield seeks $25 million

Deerfield Capital is looking to raise $25 million via a private placement of senior subordinated convertible notes.

The deal was arranged March 22, according to a regulatory filing.

Bounty Investments LLC is the investor.

The 71/2-year notes are initially convertible into common shares at $6.05 per share, or approximately 165.29 shares per $1,000 in notes.

The notes will bear interest at 8% in the first and second years. In the third year, the rate will be 9%, and 10% in the fourth. After that, the interest rate increases to 11%.

The company has the option to pay 50% of the interest in kind.

Also, the notes carry a clause allowing for them to be called at par plus interest plus a call premium.

Use of proceeds

Deerfield intends to use the proceeds to repurchase $73.9 million of series A and B senior secured notes at a total price of $55 million plus accrued interest.

Additionally, the Rosemont, Ill.-based fixed-income investor announced it will purchase Columbus Nova Credit Investment Management, LLC, a Charlotte-based investment manager specializing in leveraged loan credit products with $1.8 billion of assets under management from Bounty Investments.

"These transactions are transformative for DFR," said Jonathan Trutter, chief executive officer, in a press release. "In addition to achieving our goals of increasing AUM and growing top line revenue, these transactions strengthen our balance sheet, which will now be structured to facilitate our future growth and provides us with a valuable partner in Columbus Nova,

"These transactions follow solid 2009 financial performance which included four consecutive profitable quarters and continued improvements in our overall financial performance."

"The agreement to invest in DFR demonstrates confidence in the ability to grow the business and deliver strong financial results," added Andrew Intrater, CEO of Columbus Nova. "We expect management to accelerate the company's growth through new operating initiatives and acquisitions. We are very confident that DFR is well positioned to benefit from this acquisition to become a premier asset manager."

Deerfield's stock (Nasdaq: DFR) gained 82.3 cents, or 16.14%, to $5.923. Market capitalization is $35.6 million.

RXi announces direct placement

RXi Pharmaceuticals brought a $16.2 million registered direct offering of stock and warrants to market.

The company will issue 2.7 million common shares and warrants for another 540,000 common shares. The shares and warrants will be sold as units at $6.00 each. Each unit will hold one common share and 0.2 warrants. Whole warrants are exercisable at $6.00 for 78 months.

"We believe that this offering enables us to accelerate the progression of our pipeline and to continue to leverage our unique and powerful RNAi therapeutic platform," said Noah D. Beerman, president and CEO, in a press release.

"In addition, we have taken the opportunity to reduce CytRx's ownership position in RXi. Closing this financing meets one of the key operational goals for RXi in 2010 and is a significant step in our efforts to build a premier biopharmaceutical company."

Proceeds from the financing will be used to meet working capital needs and for general corporate purposes. RXi also intends to use some funds to repurchase 675,000 shares of RXi stock from CytRx at $5.70 per share. Settlement is expected by March 26.

RXi's shares (Nasdaq: RXII) fell $2.15, or 26.51%, to $5.96. Market capitalization is $96.59 million.

RXi Pharmaceuticals is a Worcester, Mass.-based discovery-stage biopharmaceutical company pursuing the development and commercialization of proprietary therapeutics based on RNA interference for the treatment of human diseases.

Macarthur to issue stock

Macarthur Minerals is seeking C$9 million from a private placement of equity, according to a press release.

The Vancouver, B.C.-based company will issue 6 million common shares in the non-brokered placement at C$1.50 per share.

Proceeds will be used to advance the company's Lake Giles project, as well as for general working capital.

The company could not be reached for comment Tuesday.

Macarthur's equity (TSX Venture: MMS) improved by 14 cents, or 7.78%, to C$1.94. Market capitalization is C$44 million.

Cream deal increased

Cream Minerals, a Vancouver, B.C.-based mineral exploration company, announced it had lifted a previously announced private placement of units to C$1.64 million.

The deal originally priced Jan. 25 at C$1.4 million. The company elected to increase the offering, as the deal was oversubscribed.

Cream will sell the units at C$0.07 each, with each unit containing one common share and one warrant. The warrants are exercisable at C$0.10 in the first year and at C$0.15 in the second.

Proceeds will be used for exploration and development of the company's Mexico and Canada projects, as well as for working capital. Settlement is expected by March 25.

Cream's stock (TSX Venture: CMA) ended unchanged at C$0.105. Market capitalization is C$7.11 million.

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