By Rebecca Melvin
New York, Jan. 31 - North American Palladium Ltd. priced C$27.5 million of 7.5% five-year convertible debentures with an initial conversion price of $0.635, according to a news release.
The debenture priced together with about 14.4 million warrants to purchase common shares, which have a strike price of C$0.762.
The deal represents the first of two tranches of 7.5% convertibles that the company intends to price.
Tranche two is for up to C$43 million of convertibles together with warrants that are subject to approval of shareholders at a meeting March 18.
The securities were registered in the United States and also offered in Canada under a short-form base shelf prospectus and were sold via Edgecrest Capital Corp. as lead placement agent and sole bookrunner for a syndicate of underwriters in Canada, and Canaccord Genuity Inc. in the United States.
The previously mentioned lead investor is no longer involved with the offering and has been replaced by other investors, the company said in the release.
Previously, Crede CG III, Ltd., a wholly owned subsidiary of U.S.-based Crede Capital Group LLC, was expected to purchase C$40 million of the securities, including C$20 million from each tranche.
Proceeds from the offering are expected to be used for general corporate purposes.
The company believes proceeds from the two tranches will be sufficient to fund the company's activities for the next 12 months. But if financing is not completed, the company may be forced to pursue strategic alternatives, which may include, recapitalization of its debt, the company has said.
Toronto-based North American Palladium is a platinum group metals exploration company.
| Issuer: | North American Palladium Ltd.
|
| Issue: | Convertible debentures
|
| Maturity: | Jan. 31, 2019
|
| Bookrunners: | Syndicate led by Edgecrest Capital Corp. in Canada, Canaccord Genuity Inc. in the United States
|
| Coupon: | 7.75%
|
| Price: | Par
|
| Yield: | 7.75%
|
| Distribution: | Public offering in Canada, registered in the United States
|
| Stock symbols: | Toronto: PDL; NYSE: PAL
|
|
|
| Tranche 1
|
| Amount: | C$27.5 million
|
| Concurrent offering: | 14.4 million warrants with a C$0.762 strike
|
| Conversion price: | C$0.635
|
| Closing: | Jan. 30
|
| Stock price: | C$0.53 at close Jan. 30
|
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