Raser Technologies greenshoe fully exercised, lifts 8% convertibles to $55 million

By Devika Patel

Knoxville, Tenn., April 1 - Underwriters for Raser Technologies Inc.'s offering of 8% convertible senior notes due 2013 exercised their over-allotment option in full for $5 million more of the notes, increasing the size of the issue to $55 million, the company said in a news release.

As previously reported, the company priced the notes on March 19 at par with an initial conversion premium of 20%.

The senior notes are non-callable for life and are not putable. There is full dividend protection via a conversion ratio adjustment, and there is change-of-control protection through a make-whole adjustment premium delivered upon conversion as incremental shares. Conversion settlement will be stock with fractional shares paid in cash.

Merrill Lynch was the bookrunner.

Most proceeds will be used to continue well field and other geothermal power plant development and for general corporate purposes.

In addition, Raser expects to use $8 million of the net proceeds to fund a two-year interest escrow account and to fund the cost of call spread and prepaid forward share repurchase transactions. This hedging will cost $21 million and raise the effective conversion premium from the company's perspective to 45%.

Provo, Utah-based Raser is a technology licensing and development company focused on geothermal power generation.

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