By Susanna Moon
Chicago, June 20 - Fortress Paper Ltd. said it will now issue C$60 million of 7.5-year convertible debentures in a bought deal, after pricing C$40 million of the convertibles at par on Tuesday to yield 7% with an initial conversion premium of 44%.
There is now a 30-day over-allotment option for another C$9 million of notes, up from C$6 million, according to a company press release.
The company cited strong investor demand as the reason for the upsizing just a day after pricing.
The Regulation S deal was brought by a syndicate of underwriters co-led by Raymond James Ltd. and Scotiabank and including Canaccord Genuity Corp., Dundee Securities Ltd., RBC Capital Markets, TD Securities Inc., CIBC World Markets Inc., Cormark Securities Inc. and Acumen Capital Finance Partners Ltd.
The debentures are convertible at a price of C$31.00 per common share.
The securities are non-callable until July 1, 2015 and then are provisionally callable for two years, subject to a 125% price hurdle. After July 1, 2017, they are freely callable.
Proceeds will be used to fund capital expenditures relating to the cogeneration project at the Fortress Specialty Cellulose Mill, funding of capital expenditures relating to the Lebel-sur-Quevillon Mill, subject to the completion of the acquisition, and working capital and general corporate purposes.
The deal is being sold via a public offering in all the provinces of Canada and is subject to regulatory approval.
Fortress Paper is a producer of security and other specialty papers and is based in North Vancouver, B.C.
| Issuer: | Fortress Paper Ltd.
|
| Issue: | Unsecured convertible debentures
|
| Amount: | C$60 million
|
| Greenshoe: | C$9 million
|
| Maturity: | Dec. 31, 2019
|
| Underwriters: | Syndicate led by Raymond James Ltd. and Scotiabank and including Canaccord Genuity Corp., Dundee Securities Ltd., RBC Capital Markets, TD Securities Inc., CIBC World Markets Inc., Cormark Securities Inc. and Acumen Capital Finance Partners Ltd.
|
| Coupon: | 7%
|
| Price: | Par
|
| Yield: | 7%
|
| Conversion premium: | 44%
|
| Conversion price: | C$31.00
|
| Call: | On July 1, 2015 and then provisionally callable for two years at a 125% price hurdle
|
| Pricing date: | June 19
|
| Upsized: | June 20
|
| Settlement date: | July 10
|
| Distribution: | Regulation S, short-form prospectus in all Canadian provinces
|
| Stock symbol: | Toronto: FTP
|
| Stock price: | C$21.48, as of close June 19
|
| Market capitalization: | C$307.4 million
|
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