Petrobank Energy to price $300 million six-year convertibles to yield 4.75%-5.25%, up 27.5%-32.5%

By Rebecca Melvin

New York, June 25 - Petrobank Energy and Resources Ltd. plans to price $300 million of six-year convertible notes, which were talked to yield 4.75% to 5.25% with an initial conversion premium of 27.5% to 32.5%, according to a news release.

ABG Sundal Collier Norge ASA is the bookrunner for the offering, which may be increased by up to $100 million of additional notes.

The private placement is being conducted outside of Canada.

The notes are non-callable for four years and then are provisionally callable if the price of Petrobank common stock exceeds 140% of the notes' conversion price.

Holders will have a one-time right on July 10, 2012 to convert their notes at an early conversion price, based on the volume weighted average share price of the stock for 20 consecutive trading days prior to July 10, 2012.

The notes are expected to be issued on or about July 10. The offering is subject to certain approvals, including the approval of the Toronto Stock Exchange.

Proceeds will be used to expand a drilling program in southeast Saskatchewan; to fund phase one of May River, to commercially expand its THAITM technology; and to capitalize on opportunities in the energy sector.

Calgary, Alta.-based Petrobank is an oil and natural gas exploration and production company with operations in western Canada and Latin America.

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