Australian uranium miner Paladin Energy has raised USD274 million from the sale of five-year convertible bonds (CBs) to repurchase its outstanding 2013 CBs.
Paladin on April 23 launched the bonds at a base issue size of USD225 million with an upsize option of up to USD49 million, which was exercised fully at the time of pricing following strong investor interest.
The bonds were priced at par with a coupon and yield to maturity of six percent and a conversion premium of 25 percent, both fixed at the wider end of the initial marketed range. The coupon and yield were offered in the range between 5.5 percent and six percent. The conversion premium, meantime, was marketed within a range between 25 percent and 30 percent. At a 25 percent conversion premium, the initial conversion price of the CB works out to be AUD2.112.
The proceeds will be used to fund a tender offer, launched simultaneously with the new CB offer, to acquire up to USD200 million of its previous USD325 million convertible bond issue which will mature on March 2013. The rest of the proceeds will be used to pursue future growth opportunities.
The tender offer will expire on May 22 2012 and is expected to settle on May 29. Barclays is acting as the dealer manager for the tender offer.
Barclays is also the sole global coordinator as well as joint lead manager and bookrunner along with RBC Capital Markets and UBS on the new CB deal.
The bonds do not come with investor put option except on change of control and delisting at par. There is an issuer call after three years at 130 percent hurdle.
Australia and Canada-listed Paladin has two key projects in Africa including the Langer Heinrich mine located in Namibia, which is operational and has a current annual production of 3.7 MIb of triuranium octoxide, ramping up to 5.3 MIb annually. Another project in Africa is the Kayelekera mine located in Malawi which has recently been successfully commissioned and has a capacity of 3.3 MIb triuranium octoxide.