By Abigail W. Adams
Portland, Me., May 1 – Sirius Minerals plc priced $400 million 5% convertible notes due 2027 prior to the market open on Wednesday at par with an initial conversion premium of 25%, according to a company news release.
The bonds will be redeemed upon maturity at 160.19% of their principal amount, resulting in a yield to maturity of 10%.
Price talk was for a coupon of 5%, a yield to maturity of 10% and an initial conversion premium of 20% to 25%.
The company also placed $106.6 million in guaranteed convertible bonds due 2027 with holders of the outstanding $244.2 million of the guaranteed convertible bonds due 2023 that agreed to sell their bonds as part of a repurchase offer.
J.P. Morgan Cazenove is bookrunner for the offering, which is being marketed to qualified institutional buyers in the European Economic Area.
The initial conversion price is $0.2443, and the reference share price in the concurrent equity offering is 15p converted to U.S. dollars via a fixed conversion rate of 1:07676.
The conversion price for the bonds will be adjusted on May 25, 2020 in accordance with a pre-determined formula.
If the conversion price is less than the reference share price of $0.1954, it will be reset to be equal to the reference share price.
Holders will receive a make-whole payment in addition to ordinary shares upon conversion.
The bonds will be callable in whole but not in part from June 13, 2021 to June 13, 2023 at 150% of the accreted principal amount and after June 13, 2023 at 130% of the accreted amount.
Concurrently with the convertible bond offering, the company is offered to repurchase the outstanding $244.2 million of its guaranteed convertible bonds due 2023 to holders that agree to apply the cash amount to the purchase of new guaranteed convertible bonds due 2027.
Approximately $106.6 million of the 2023 bonds were offered for repurchase.
In addition to receiving the 2027 bonds, holders will receive a cash amount of $4,013.89 per $200,000 of the principal amount repurchased.
The 2023 bonds will have $137.6 million outstanding after the closing date.
The company also priced $425 million or £327 million in a concurrent equity offering.
Proceeds from the new convertible bonds offering will be placed in escrow and will be released to the issuer upon the earlier of Jan. 23, 2020 or the completion of an issuance of senior secured guaranteed bonds or other financing of at least $500 million or the entry into a revolving credit facility with a committed amount of $2.5 billion.
Following the release of the funds from escrow, proceeds will fund the development of the North Yorkshire mine in the United Kingdom.
Sirius Minerals is a U.K.-based fertilizer development company.
| Issuer: | Sirius Minerals plc
|
| Securities: | Guaranteed convertible bonds
|
| Amount: | $400 million
|
| Maturity: | May 23, 2027
|
| Bookrunner: | J.P. Morgan Cazenove
|
| Coupon: | 5%
|
| Price: | Par
|
| Price at maturity: | 116.19% of par
|
| Yield to maturity: | 10%
|
| Conversion premium: | 25%
|
| Conversion price: | $0.2443
|
| Call options: | Callable in whole but not in part from June 13, 2021 to June 13, 2023 at 150% of the accreted principal amount and after June 13, 2023 at 130% of the accreted amount
|
| Pricing date: | May 1
|
| Settlement date: | May 23
|
| Distribution: | European Economic Area
|
| Talk: | Coupon of 5%, yield to maturity of 10% and initial conversion premium of 20% to 25%
|
| Stock symbol: | London: SXX
|
| Reference stock price: | $0.1954
|
| Market capitalization: | £788.16 million
|
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