Northland Resources convertible bondholders approve new bond issue

By Angela McDaniels

Tacoma, Wash., April 4 - Northland Resources SA's new issue of super senior secured bridge bonds received approval from the holders of its 4% convertible second-lien bonds due 2020, according to a notice from bond trustee Norsk Tillitsmann ASA.

At a bondholder meeting on April 4, there were enough bondholders present to form a quorum, and 99.14% of the votes cast were in favor of the proposal.

Northland Resources AB (publ.) priced $60 million of the super senior secured bridge bonds. Arctic Securities ASA and Swedbank acted as joint lead managers and bookrunners.

On March 21, the company said the bridge bonds would first be offered on a pro rata basis to holders of its outstanding first-lien bonds. The bridge bonds were expected to have a term of six to 12 months and accrue pay-in-kind interest at 11% per year.

The company said it will need up to $150 million of funding and plans to present a financing proposal for long-term funding later in 2014. The company expects the proceeds of the bridge bonds to provide enough liquidity until that long-term financing can be put in place.

As part of the planned long-term financing, some holders of the company's first-lien bonds have committed to convert about $60 million of their bonds into either Northland shares or a new unsecured fully subordinated bond issued by Northland with a tenor of three years and PIK interest only. The subordinated bonds would be mandatorily convertible to equity with a strike price of 35% above the share price at pricing.

Also, about $60 million to $65 million of trade debt will be converted to shares in Northland.

Northland is a Luxembourg-based producer of iron ore concentrate.

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