Senior unsecured notes sold to syndicate of underwriters and Paulson
By Devika Patel
Knoxville, Tenn., Nov. 17 - Detour Gold Corp. said a syndicate of underwriters led by BMO Capital Markets and including RBC Capital Markets and UBS Securities Canada Inc. has agreed to invest in the company's 5.5% senior unsecured convertible notes. The $500 million private placement was originally announced on Nov. 12 as an offering of 5% senior unsecured convertible notes.
The syndicate will buy $250 million of the convertibles. Detour also said that Paulson & Co. Inc. will buy $175 million of the 5.5% notes and $75 million of cash settled notes, which are identical to the 5.5% convertibles except they convert to cash, not shares.
Both notes are due on Nov. 30, 2017 and are convertible at $38.50 per common share, which is a 30% premium to the $29.74 closing price of the stock on Nov. 16. The notes may be redeemed after three years.
Proceeds will be used to finance the development of the company's Detour Lake gold project in Ontario.
"The signing of this indication of intent marks another significant step in the development of the Detour Lake project," president and chief executive officer Gerald Panneton said in a press release on Nov. 12.
"In 2010, the company achieved several significant milestones, including the completion of a positive feasibility study, provincial approval to commence construction, raising C$290 million in equity, and proceeding with this convertible notes financing. These achievements have allowed Detour Gold to remain on target for commencing mining operations in early 2013."
The gold exploration and development company is based in Toronto.
| Issuer: | Detour Gold Corp.
|
| Issue: | Senior unsecured convertible notes, cash settled notes
|
| Amount: | $500 million
|
| Maturity: | Nov. 30, 2017
|
| Coupon: | 5.5%
|
| Price: | Par
|
| Yield: | 5.5%
|
| Conversion price: | $38.50
|
| Conversion premium: | 30%
|
| Call: | After three years
|
| Warrants: | No
|
| Pricing date: | Nov. 12
|
| Revised: | Nov. 17
|
| Stock symbol: | Pink Sheets: DRGDF
|
| Stock price: | $28.49 at close Nov. 17
|
| Market capitalization: | $2.34 billion
|
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