Vertex Energy talks $155 million six-year convertibles at 90 with 6.25%-6.75% coupon, up 35%-40%

By Abigail W. Adams

Portland, Me., Oct. 25 – Vertex Energy Inc. plans to price $155 million of six-year convertible notes after the market close on Tuesday at a discounted offer price of 90, a coupon of 6.25% to 6.75% and an initial conversion premium of 35% to 40%, according to a market source.

Oppenheimer & Co. Inc. is placement agent for the Section 4(a)(2) offering.

The notes will be settled in cash, shares or a combination of both at the company’s option provided shareholders approve the issuance of common stock.

Pending shareholder approval, the notes will be settled in cash.

Approximately $33.7 million of net proceeds will be used to fund the acquisition of a refinery, $13 million will be used for initial payments of purchase orders for lead-time equipment; $10.9 million will be used to repay amounts owed under its credit facilities with Encina Business Credit LLC; and $0.4 million will be used to repay equipment leases.

Remaining proceeds will be used for general corporate purposes.

Vertex Energy is a Houston-based refiner of alternative feedstocks.

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