Fortress Paper greenshoe increases 7% convertibles to C$69 million

By Tali David

Minneapolis, July 10 - Fortress Paper Ltd. said the over-allotment option on its offering of 7% convertible senior subordinated debentures was exercised in full, increasing the offering proceeds to C$69 million.

As previously reported, the company priced C$60 million of the 7.5-year convertibles on June 20.

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 Dominion Securities Inc., TD Securities Inc., CIBC World Markets Inc., Cormark Securities Inc. and Acumen Capital Finance Partners Ltd., according to a press release.

The initial conversion premium is 44%, and the conversion price is C$31.00.

The convertibles 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, to fund capital expenditures relating to the Lebel-sur-Quevillon Mill and for working capital and general corporate purposes.

Fortress Paper is a producer of security and other specialty papers and is based in North Vancouver, B.C.

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