http://business.financialpost.com/
For those who like their financings complex, the recent news from Sherritt International will provide sufficient fodder for at least a few meals.
Over two days, it announced: a $100 million offering of units; a plan to purchase, by way of a Dutch auction, up to $75 million of high-yield debentures; and the pricing of the unit offering, which because of strong demand, ended up at $115 million.
And, as a little something on top, the unit offering consisted of a share and half a warrant linked to the high-flying price of cobalt, a metal Sherritt produces. The equity deal is Sherritt’s first in a decade.
The point of all this: the proceeds from the unit offering, led by Paradigm Capital, Eight Capital and National Bank Financial on a best-efforts basis, will be used to reduce outstanding indebtedness, “for general corporate purposes and to fund future growth initiatives.” (As of Sept. 30, 2017, the non-investment-grade-rated Sherritt had $813 million in debt outstanding.)
Specifically, the bulk of the proceeds will be used to repurchase (at a discount to issue price) part of three issues of senior unsecured debentures set to mature in three years, five years and seven years. The face value of those three issues is $720 million, meaning Sherritt is planning to buy back about 10 per cent of what’s outstanding. Post announcement, the prices of all three have risen.
For the rest of this article: http://business.financialpost.com/news/fp-street/sherritt-gets-creative-with-debt-and-equity-financings