North American Palladium plans up to C$35 million 7.5% five-year convertibles

By Rebecca Melvin

New York, April 7 - North American Palladium Ltd. plans to price up to C$35 million of 7.5% five-year convertible debentures and two-year warrants representing 25% of the common shares that the debentures are convertible into, according to an indicative term sheet.

The debentures offering, which was downsized from an originally talked C$43 million of debentures, and the warrants offering, which was downsized from an initial 33.33% of the common shares that the debentures are convertible into, are being sold on a best-efforts basis via Edgecrest Capital Corp., as lead bookrunner for a syndicate including Canaccord Genuity Corp. and Canaccord Genuity Inc.

Proceeds will be used for expenditures of the company's Lac des les mine, exploration, mining equipment and other general corporate purposes, including ordinary course repayments under the company's $60 million revolving operating credit facility and interest under a $170 million term loan.

The debentures are non-callable for 18 months and then are provisionally callable if shares exceed 150% of the volume weighted average price of shares for 10 trading days.

The warrants are also callable after 18 months if the VWAP of shares exceeds 150% of the warrant exercise price for 10 trading days.

There is takeover protection at 102% of par.

Shares issuable under the terms of the debentures and warrants are expected to be listed, subject to the approval of the Toronto Stock exchange and New York Stock exchange.

Toronto-based North American Palladium is a platinum group metals exploration company.

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