Vancouver – Looking to refinance costs associated with the recent acquisition of East African Gold Mines, Placer Dome (PDG-T) has added US$500 million to its till.
The major reached agreements to issue US$300 million of unsecured senior debentures with a 32-year maturity, and US$200 million of unsecured senior convertible debentures with a 20-year maturity. The 32-year debentures will be sold at 99.649% of their principal amount to yield 6.476%, pegging the yearly interest rate at 6.45%. The US$200 million offering will be sold as unsecured senior convertible debentures with interest payable at 2.75% a year. The holders of this debt will have the right to convert the debentures into shares with each US$1,000 principal amount convertible into 47.79 shares, pegging Placer’s share price at US$20.925, some 55% above the US$13.50 closing price before the deal was announced.
Placer Dome retains the right to buy the convertible debentures at any time after seven years. Meanwhile, the debt holders may put the convertible debentures to Placer Dome in exchange for cash at 10 years and 15 years from the date of issue. The convertible debentures will mature in 20 years.
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