Sirius Minerals to sell $400 million seven-year convertible bonds; price talk 8%-8.5%, up 25%-30%

By Stephanie N. Rotondo

Seattle, Nov. 2 – Sirius Minerals plc and its subsidiaries have launched a $400 million offering of guaranteed convertible bonds due Nov. 28, 2023 with a yield of 8% to 8.5% and an initial conversion premium of 25% to 30%, the company said in a press release on Wednesday.

There is an option to increase the sale by $50 million. Final pricing is expected Nov. 3.

J.P. Morgan Securities LLC is the bookrunner.

The convertible debt becomes redeemable on or after Dec. 19, 2018 if the ordinary shares underlying the bonds reach a 350% price hurdle. The paper can also be redeemed on or after Dec. 19, 2021 if the stock hits a 300% price hurdle.

The company can also redeem the issue if 85% or more of the principal amount has been previously converted or repurchased and cancelled.

Concurrently with the convertibles offering, the company is conducting a £330 million to £400 million equity placement. The company also said it had inked a $300 million royalty financing agreement with a subsidiary of Hancock Prospecting Pty Ltd.

All proceeds will be used to fund the $1.2 billion first stage of financing to begin the construction of the North Yorkshire polyhalite project.

Sirius Minerals is a North Yorkshire, England-based fertilizer development company.

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