Non-brokered offering of six-year notes expected to settle in February
By Devika Patel
Knoxville, Tenn., Jan. 21 - Melcor Developments Ltd. announced it has arranged a non-brokered private placement of six-year 6.25% convertible unsecured subordinated debentures. Melton Holdings Ltd., KingSett Canadian Real Estate Income Fund LP and Cavell Holdings Inc., the investors, will purchase C$40 million of the securities.
Each debenture converts to common shares at C$18.51 per share, a 32.31% premium to the Jan. 20 closing share price of C$13.99. The conversion rate is 54.02 shares per C$1,000 of debentures.
The company may redeem the convertibles between Feb. 1, 2014 and Jan. 31, 2016 at par plus interest earned if the volume weighted average trading price of the stock is at least 125% of the conversion price, or about C$23.14, for 20 consecutive trading days. After Feb. 1, 2016, it may redeem the debentures at par plus accrued interest.
Settlement is expected Feb. 8.
Proceeds will be used for general corporate purposes.
The Edmonton, Alta., company develops and manages mixed-use residential communities, business and industrial parks, office buildings, retail commercial centers and golf courses.
| Issuer: | Melcor Developments Ltd.
|
| Issue: | Convertible unsecured subordinated debentures
|
| Amount: | C$40 million
|
| Maturity: | Six years
|
| Coupon: | 6.25%
|
| Price: | Par
|
| Conversion price: | C$18.51
|
| Conversion rate: | 54.02 shares per C$1,000 of debentures
|
| Conversion premium: | 32.31%
|
| Call: | Between Feb. 1, 2014 and Jan. 31, 2016 if volume weighted average trading price is 125% or more of conversion price for 20 consecutive trading days; otherwise after Feb. 1, 2016
|
| Warrants: | No
|
| Agent: | Non-brokered
|
| Investors: | Melton Holdings Ltd., KingSett Canadian Real Estate Income Fund LP and Cavell Holdings Inc.
|
| Pricing date: | Jan. 21
|
| Settlement date: | Feb. 8
|
| Stock symbol: | Toronto: MRD
|
| Stock price: | C$14.00 at close Jan. 21
|
| Market capitalization: | C$421.53 million
|
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