By Rebecca Melvin
New York, July 26 – Golden Star Resources Ltd. priced $65 million of five-year convertible senior notes late Monday at the cheap end of talked terms to yield 7% with an initial conversion premium of 20%, according to market sources.
As part of the Rule 144A and Regulation S deal, Golden Star has entered into exchange and purchase agreements with two holders of its 5% convertible senior unsecured debentures due June 1, 2017 to exchange $40 million principal amount of the older paper for an equal amount of the new notes.
Concurrently with the offering of new convertibles, Golden Star is pricing $30 million of common shares.
The new notes, which were talked to yield 6.5% to 7% with a 20% to 25% premium, are non-callable for three years and then provisionally callable if pricing of the common stock exceeds 130% of the conversion price.
There are no investor puts. The notes settle in stock, cash or a combination of stock and cash at the issuer’s option.
Proceeds of the offerings are being used to repurchase debt, including the convertibles and a term loan with Ecobank Ghana Ltd. Remaining funds will be used for general corporate purposes. The company will not receive any cash proceeds from the exchange.
Golden Star is a Littleton, Colo.-based gold mining firm with share listings on the New York Stock Exchange, Toronto Stock Exchange and Ghana Stock Exchange.
| Issuer: | Golden Star Resources Ltd.
|
| Issue: | Convertible senior notes
|
| Amount: | $65 million
|
| Maturity: | Aug. 15, 2021
|
| Concurrent offering: | $30 million of common stock
|
| Bookrunner: | BMO Capital Markets
|
| Coupon: | 7%
|
| Price: | Par
|
| Yield: | 7%
|
| Conversion premium: | 20%
|
| Conversion price: | $0.90
|
| Conversion ratio: | 1111.1111
|
| Call: | Non-callable for three years, then provisionally callable at 130% price hurdle
|
| Puts: | None
|
| Contingent conversion: | Yes, at 130% price hurdle
|
| Net share settlement: | Yes
|
| Price talk: | 6.5%-7%, up 20%-25%
|
| Pricing date: | July 25
|
| Settlement date: | Aug. 3
|
| Stock symbol: | NYSE: GSS
|
| Stock reference price: | $0.78 at close July 25
|
| Market capitalization: | $291.3 million
|
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