By Rebecca Melvin
New York, Oct. 30 – Arch Resources Inc. priced an upsized $135 million of five-year convertible notes after the market close on Thursday at par to yield 5.25% with an initial conversion premium of 25%, according to a company news release.
There is a $20.25 million greenshoe.
The Rule 144A offering was initially talked at $125 million in size with an $18.75 million greenshoe.
Pricing occurred at the cheap end of 4.75% to 5.25% coupon talk and at the midpoint of 22.5% to 27.5% talk for the initial conversion premium.
The notes are non-callable until Nov. 30, 2023 and then subject to a 130% hurdle.
They will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transaction, with a cap price of $52.26 per share initially, representing a premium from the issuer’s perspective of 75%.
Jefferies LLC and Goldman Sachs & Co. LLC were bookrunners for the deal for which proceeds will be used to cover the cost of the call spread and for general corporate purposes, including funding the development of the company’s Leer South mine.
Arch Resources is a St. Louis-based mining company.
| Issuer: | Arch Resources Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $135 million, upsized from $125 million
|
| Greenshoe: | $20.25 million, upsized from $18.75 million
|
| Maturity: | Nov. 15, 2025
|
| Bookrunners: | Jefferies LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 5.25%
|
| Price: | Par
|
| Yield: | 5.25%
|
| Conversion premium: | 25%
|
| Conversion price: | $37.32
|
| Conversion rate: | 26.7917
|
| Call options: | Non-callable until Nov. 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Capped call transactions: | Yes, at $57.26 strike
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| Pricing date: | Oct. 29
|
| Settlement date: | Nov. 3
|
| Distribution: | Rule 144A
|
| Talk: | 4.75%-5.25%, up 22.5%-27.5%
|
| Stock symbol: | NYSE: ARCH
|
| Stock price: | $29.86 at market close Oct. 29
|
| Market capitalization: | $5.15 billion
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