Bridge Resources wraps $43.96 million total; Citi raises $12.5 billion; Merrill Lynch to sell $6.6 billion

By LLuvia Mares

New York, Jan.15 - Now that Bridge Resources Corp. has closed its final tranche, the company said it is ready to continue drilling and exploration efforts.

Bridge Resources said it raised C$6.06 million in the second and final tranche of a private placement of units, for a total deal size of C$43.96 million. The offering priced Dec. 13 for up to C$55 million and the company took in C$37.9 million in the first tranche on Dec. 21.

"We were getting ready to drill wells and we wanted to get enough money in bank to be able to commit to the first well, that's why we decided to go with tranches," said a company insider. "This way we didn't have to wait for all of the money to come at once.

"Little companies like ours are always looking for financing but we have no immediate plans," he said. "We are also always looking for acquisitions."

In the first closing, Bridge sold 44,584,476 units. It sold 7,134,730 units in this tranche, for a total of 51,719,206 units. The company planned to sell up to 64,706,000 units at C$0.85 each.

The units consist of one common share and one warrant. The warrants are exercisable at C$0.95 for two years.

The company's stock (TSX Venture: BUK) closed at C$1.00 on Tuesday, up C$0.06 from Monday's C$0.94 close.

Blackmont Capital Inc. and Macquarie Capital Markets Canada Ltd. were co-lead agents in North America and Mirabaud Securities was the co-lead agent in the United Kingdom.

Proceeds will be used for drilling and general corporate purposes.

Based in Calgary, Alta., Bridge is a natural gas and petroleum exploration company.

Citi raises $12.5 billion

In by far the largest deal in PIPEs this year, Citigroup Inc. announced it is raising $12.5 billion in a private placement of convertible preferreds.

"We are taking comprehensive action to position Citi for the future with the capital strength that will allow us to refocus on earnings and earnings growth," said Vikram Pandit, company chief executive officer, in a press release. "In an uncertain environment, these actions put us on our front foot, focused on capturing opportunities that earn attractive returns for our shareholders."

The Government of Singapore Investment Corp. Pte Ltd. invested $6.88 billion.

Capital Research Global Investors, Capital World Investors, the Kuwait Investment Authority, the New Jersey Division of Investment, Alwaleed bin Talal bin Abdulaziz Alsaud, and Sanford I. Weill and The Weill Family Foundation also invested in the offering.

The perpetual preferred stock will have a coupon of 7% and a conversion premium of 20%. It is non-callable for seven years and subject to a capital-replacement covenant before the 12th year.

After the fifth year, Citi may force conversion if its stock exceeds 130% of the conversion price.

Dividends on the preferreds will be non-cumulative and payable quarterly.

The conversion premium will be lowered if, within one year, Citi issues more than $5 billion of certain securities with a lower reference or conversion price.

Citi's stock (NYSE: C) closed at $26.94 on Tuesday, down $2.12 from Monday's $29.06 close.

Citi announced the private placement as part of a series of financial deals intended to strengthen its capital base. The New York-based financial company also said it is selling non-convertible securities and about $2 billion of convertible preferreds in a public offering, lowering its quarterly dividend and continuing to sell non-core assets.

Merrill Lynch to sell $6.6 billion

Not far behind, Merrill Lynch also announced Tuesday it negotiated agreements to raise $6.6 billion from private placements of non-voting mandatory convertible non-cumulative preferred stock, series 1.

"I am very pleased with today's announcement," said John A. Thain, company chairman and chief executive officer, in press release. "One of my main priorities over the last several weeks has been to ensure Merrill Lynch's balance sheet is strong, and these transactions make certain that Merrill Lynch is well-capitalized.

"In addition, the benefits of Merrill Lynch's collaboration with these high quality, long-term investors are significant," he said. "Through their global reach and diverse client relationships, we are looking forward to more strategic opportunities around the world."

Korean Investment Corp., Kuwait Investment Authority and Mizuho Corporate Bank are the lead investors. TPG-Axon Capital, The New Jersey Division of Investment, The Olayan Group and T. Rowe Price Associates Inc. are also participating on behalf of various clients.

The preferred stock matures in 33 months and bears dividends at 9% per year. It is has a conversion premium of 17%.

At maturity, the preferreds will be mandatorily converted into common stock at a conversion price equal to the then-current price of the stock, subject to a minimum rate of $52.40 and a maximum of $61.308.

The minimum is equal to the three-day average closing price of the company's stock on Jan. 11. The maximum is equal to 117% of the minimum.

Merrill's stock (NYSE: MER) closed at $53.01 on Tuesday, down $2.96 form Monday's $55.97 close.

The conversion ratio will be adjusted if, within one year of closing Merrill Lynch sells more than $1 billion of common stock or securities convertible into common stock with a reference price per share less than $52.40.

Merrill Lynch is a New York-based financial company.

MoneyGram working on $850 million preferreds

Although its shares dropped by more than 50% Tuesday, MoneyGram International, Inc. announced plans to conduct a private placement of convertible preferred stock for about $750 million to $850 million.

MoneyGram said it is engaged in exclusive negotiations with an investor group led by Thomas H Lee Partners, LP.

Settlement would depend on conditions including debt financing, amendment of existing agreements and MoneyGram's liquidation of a significant portion of its existing investment portfolio.

MoneyGram expects the execution of definitive documents in January and a funding in February.

Initially, investors would probably receive a combination of non-voting preferred sock, common stock and contingent value rights. Upon shareholder approval, all of that would be exchanged for the convertible preferreds. Shareholder approval would be required within six months of the agreement date.

After the deal, the investors would have an equity interest in MoneyGram of about 60% to 65%.

The equity placement would be part of a recapitalization that is also expected to include $550 million to $750 million of new debt facilities.

The company's stock (NYSE: MGI) closed at $6.15 on Tuesday, down $6.02 from Tuesday's $12.17 close.

Some of the proceeds would be used to realign MoneyGram's portfolio away from the asset-backed security market. The rest would be used for general corporate purposes after realignment.

MoneyGram is a payment services company based in Minneapolis.

Axion negotiates an $18 million

Axion Power International, Inc. announced Tuesday it entered into a definitive agreement with the Quercus Trust for an $18 million equity investment.

"We are extremely happy that Quercus has chosen to become a strategic investor in Axion," said Tom Granville, company chief executive officer, in a press release. "Over the last year, Quercus has established itself as a leading strategic investor in the alternative energy and clean tech sectors by investing in emerging companies like ours."

"We applaud their continued commitment to companies like Axion that provide environmentally sound solutions for global energy issues," he said. "This staged investment from Quercus should give us sufficient capital to complete our process development work, expand our manufacturing capabilities and begin marketing commercial battery products that are based on our exciting new PbC(TM) technology."

Quercus agreed to purchase 1,904,762 units at $2.10 per unit and a warrant to purchase 1.5 shares of stock at an exercise price of $2.60 per share. The initial closing was Jan. 14.

The second closing will be five days after Axion brings its Securities Exchange Commission reporting current, which is expected during the first quarter of 2008. Quercus will purchase an additional 1,904,762 units at $2.10 per unit, each including a warrant to buy 1.25 shares at an exercise price of $2.60 per share.

The company will also purchase 4,761,905 additional units for $10 million during the third closing, each including a warrant to purchase one share at $2.60 per share. The warrants expire in five years and all three closings are expected to be complete by the end of June.

Merriman Curhan Ford and Co. was the placement agent.

Proceeds will be used to complete developmental work, expand manufacturing and begin marketing battery products.

New Castle, Pa.-based Axion specializes in developing energy storage devices.

BioSpecifics sells $2.1 million

In other news, BioSpecifics Technologies Corp. settled a $2.1 million private placement of stock.

The company sold 200,000 shares at $10.50 apiece on Jan. 14. BioSpecifics Technologies is a biopharmaceutical company based in Lynbrook, N.Y.

The company's stock (Pink Sheets: BSTC) closed at $10.50 on Tuesday, up $1.00 from Monday's $9.50 close.

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