By Rebecca Melvin
New York, Sept. 21 - Russel Metals Inc. has priced an upsized C$175 million of seven-year convertibles on a bought-deal basis at par to yield 7.75% with an initial conversion premium of 45%, according to a news release.
Initially the deal size was expected to be C$150 million.
The issue was being made via a syndicate of underwriters co-led by GMP Securities LP and RBC Capital Markets, and including, Scotia Capital Inc. and TD Securities Inc.
Proceeds will be used for working capital, potential acquisitions and general corporate purposes.
The unsecured subordinated debentures, which mature Sept. 30, 2016, are convertible into shares of Russel at an initial conversion price of C$25.75 per share.
The debentures are non-callable for six years and upon conversion, Russel can opt to repay in shares and cash. Holders can opt to convert at any time up to maturity.
The Regulation S offering is expected to close on Oct. 8 and is subject to normal regulatory approvals.
The Toronto-based company is a metals distribution company serving metals service centers, energy tubular products and steel distributors.
| Issuer: | Russel Metals Inc.
|
| Issue: | Convertible unsecured subordinated debentures
|
| Joint lead managers: | GMP Securities LP and RBC Capital Markets (leads), with Scotia Capital Inc. and TD Securities Inc.
|
| Amount: | C$175 million, upsized from $150 million
|
| Maturity: | Sept. 30, 2016
|
| Coupon: | 7.75%
|
| Price: | Par
|
| Yield: | 7.75%
|
| Conversion premium: | 45%
|
| Conversion price: | C$25.75
|
| Pricing date: | Sept. 21
|
| Settlement date: | Oct. 8
|
| Distribution: | Regulation S
|
| Stock symbol: | TSX: RUS
|
| Stock reference price: | C$17.74
|
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