By Rebecca Melvin
New York, March 20 - NovaGold Resources Inc. priced a downsized $95 million of seven-year convertibles at par to yield a 5.5% with an initial conversion premium of 35%, according to a company news release.
There is an over-allotment option for up to an additional $14 million of notes. The deal was originally expected to total $100 million with a $15 million shoe.
The senior unsecured notes priced beyond the cheap end of talk for the coupon, which was between 4.25% to 4.75, and at the cheap end of talk for the initial conversion premium, seen at between 35% to 40%.
J.P. Morgan Securities Inc. was the bookrunner of the registered offering, which is non-callable and is putable in year five. The notes also have dividend and takeover protection and net share settlement.
NovaGold is a precious metals exploration and development company based in Vancouver, B.C.
Proceeds will be used to repay about C$16 million currently drawn under the company's C$30 million short-term credit facility, to fund general exploration and development and for general corporate purposes.
| Issuer: | NovaGold Resources Inc.
|
| Issue: | Convertible unsecured senior notes
|
| Amount: | $95 million, downsized from $100 million
|
| Greenshoe: | $14 million
|
| Maturity: | May 1, 2015
|
| Bookrunner: | J.P. Morgan Securities Inc.
|
| Coupon: | 5.5%
|
| Price: | Par
|
| Yield: | 5.5%
|
| Conversion premium: | 35%
|
| Conversion price: | C$10.77
|
| Conversion ratio: | 94.2418
|
| Call: | Non callable
|
| Puts: | At par on May 1, 2013
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Net share settlement: | Yes
|
| Pricing date: | March 19
|
| Settlement date: | March 26
|
| Distribution: | Registered
|
| Price talk: | 4.25% to 4.75, up 35% to 40%
|
| Stock symbol: | Amex: NG
|
| Stock price: | $7.86 at close March 19
|
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