By Sheri Kasprzak
New York, May 9 - Frontera Resources Corp. settled a $46.5 million private placement of unsecured convertible notes.
The 10% notes due May 2012 are convertible into common shares at $1.67 each, a 7.5% premium over the company's May 4 closing stock price of 78p.
Frontera may sell another $20 million in notes within 30 days of closing.
Raymond James and Associates was the placement agent.
Of the proceeds, $10 million will be placed in an escrow account from which half will be released to Frontera when the stock price exceeds the conversion price for at least 20 consecutive trading days. The rest will be released when the share price exceeds twice the conversion price for at least 20 consecutive trading days.
Proceeds will be used for development and exploration on the company's projects in Block 12 in the former Soviet state of Georgia.
Houston-based Frontera is an oil and natural gas exploration company.
| Issuer: | Frontera Resources Corp.
|
| Issue: | Unsecured convertible notes
|
| Amount: | $46.5 million
|
| Maturity: | May 8, 2012
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Conversion price: | $1.67
|
| Warrants: | No
|
| Placement agent: | Raymond James and Associates
|
| Settlement date: | May 8
|
| Stock symbol: | London: FRR
|
| Stock price: | 73p at close May 8
|
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