By Angela McDaniels
Tacoma, Wash., April 29 - Mandalay Resources Corp. priced $50 million of five-year senior exchangeable bonds at par with a 5.875% coupon, according to a company news release.
The bonds will be issued through Gold Exchangeable Ltd., an unaffiliated special-purpose vehicle, in a private placement offering. Then Mandalay, through wholly owned subsidiary Mandalay Resources Finance Ltd., will borrow the proceeds from Gold Exchangeable and use them for general corporate purposes.
The bonds will be exchangeable into shares of the SPDR Gold Shares exchange-traded fund.
The initial exchange price is $149.99, which is a premium of 20% above the volume-weighted average price on the ETF on Tuesday (currently equivalent to a gold price of $1,556 per ounce).
KNG Securities LLP is the lead manager and bookrunner.
Plans for the offering were announced April 23. Talk was for a 5% to 5.5% coupon and a 25% exchange premium.
The bonds will be callable at par after three years and one month if the closing share price of the ETF exceeds 130% of the exchange price. In addition, the issuer will have a clean-up call option if 15% or less of the principal amount of the bonds originally issued remains outstanding.
As security, the issuer will deposit into a custody account, in quarterly installments over the fourth and fifth years of the term of the bonds, the number of ETF shares issuable upon exchange of the bonds.
Mandalay Resources Finance's obligations under the loan agreements with Gold Exchangeable will mirror the terms of the bonds and will be guaranteed by Mandalay Resources.
Mandalay Resources' guarantee of Mandalay Resources Finance' obligations will be secured by first ranking pledge of all of the shares of Mandalay Resources Australia Pty. Ltd., which owns and operates Mandalay's Costerfield mine in Australia.
Mandalay Resources is a Toronto-based natural resource company with a focus on gold, copper, silver and antimony projects.
| Issuer: | Gold Exchangeable Ltd.
|
| Issue: | Senior bonds exchangeable for shares of SPDR Gold Shares ETF
|
| Amount: | $50 million
|
| Term: | Five years
|
| Bookrunner: | KNG Securities LLP
|
| Coupon: | 5.875%
|
| Price: | Par
|
| Yield: | 5.875%
|
| Exchange premium: | 20%
|
| Exchange price: | $149.99
|
| Call option: | At par after three years and one month if ETF's closing share price exceeds 130% of exchange price; clean-up call option if 15% or less bonds remain outstanding
|
| Price talk: | 5%-5.5%, up 25%
|
| Pricing date: | April 29
|
| Settlement date: | May 13
|
| ETF symbol: | NYSE Arca: GLD
|
| ETF share price: | $124.86 at close April 29
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
