By Angela McDaniels
Tacoma, Wash., June 14 - Royal Gold Inc. priced $325 million of seven-year convertible senior notes with a 2.875% coupon and a 35% initial conversion premium after the market close Thursday.
There is a $45 million over-allotment option, according to a company news release.
Originally, the convertibles were talked to yield 3.125% to 3.625% with an initial conversion premium of 30% to 35%, according to a market source. Price talk was then revised to 2.75% to 3% for the coupon and 35% for the initial conversion premium, according to a syndicate source.
The registered, off-the-shelf offering was sold via bookrunner Goldman Sachs & Co. and lead managers HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc.
The notes will be convertible beginning on March 15, 2019 or earlier upon the occurrence of certain events.
The notes are non-callable until June 15, 2015 and then are provisionally callable subject to a price hurdle of 130%.
There is a coupon make-whole payment upon redemption or conversion based on a fundamental change make-whole table.
The company can settle conversions in cash, shares or a combination of cash and shares. And there is takeover and dividend protection.
Proceeds will be used to repay the company's term loan facility, which will be terminated. Remaining proceeds will be used for general corporate purposes, including future acquisitions.
Royal Gold is a Denver-based precious metals royalties acquisitions and management company.
| Issuer: | Royal Gold Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Goldman Sachs & Co.
|
| Lead managers: | HSBC Securities (USA) Inc., Scotia Capital (USA) Inc.
|
| Amount: | $325 million
|
| Greenshoe: | $45 million
|
| Maturity: | June 15, 2019
|
| Coupon: | 2.875%
|
| Price: | Par
|
| Yield: | 2.875%
|
| Conversion premium: | 35%
|
| Conversion price: | $105.31
|
| Conversion ratio: | 9.4955
|
| Call option: | Non-callable until June 15, 2015, and then provisionally callable subject to 130% price hurdle
|
| Cash settlement: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Price talk: | 2.75%-3%, up 35%, tightened from 3.125%-3.625%, up 30%-35%
|
| Pricing date: | June 14
|
| Settlement date: | June 20
|
| Distribution: | Registered, off the shelf
|
| Stock symbol: | Nasdaq: RGLD; Toronto: RGL
|
| Stock price: | $78.01 at Nasdaq close June 14
|
| Market capitalization: | $4.65 billion
|
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