By Sheri Kasprzak
New York, March 9 - The Allied Defense Group, Inc. said it has entered into agreements for a $30 million senior convertible note placement.
The senior subordinated step-down notes are due in 2011 and are convertible into common shares at $26.46 each.
The investors include Kings Road Investments Ltd., Portside Growth & Opportunity Fund, Castlerigg Master Investments Ltd. and LBI Group Inc.
The conversion price is a 14.8% premium to the company's closing stock price of $23.05 on March 8.
The notes bear interest at 7.5% annually, and the interest rate will decline to 5% upon the achievement of certain milestone.
SG Cowen & Co., LLC is the placement agent.
The investors will receive warrants for 226,800 shares, exercisable at $27.68 each through March 2011.
Proceeds will be used to repay existing debt. The rest will be used for general corporate purposes and working capital.
Separately, the company announced Thursday that it is in talks with several banks to institute a new senior secured facility within the range of $10 million to $20 million.
The Allied Defense Group, based in Vienna, Va., develops ammunition marketed to defense departments and also designs electronic and microwave security systems.
| Issuer: | The Allied Defense Group, Inc.
|
| Issue: | Senior subordinated convertible notes
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| Amount: | $30 million
|
| Maturity: | 2011
|
| Coupon: | 7.5%
|
| Price: | Par
|
| Yield: | 7.5%
|
| Conversion price: | $26.46
|
| Warrants: | For 226,800 shares
|
| Warrant expiration: | March 2011
|
| Warrant strike price: | $27.68
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| Placement agent: | SG Cowen & Co., LLC
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| Investors: | Kings Road Investments Ltd., Portside Growth & Opportunity Fund, Castlerigg Master Investments Ltd. and LBI Group Inc.
|
| Announcement date: | March 9
|
| Stock symbol: | Amex: ADG
|
| Stock price: | $23.00 at close March 9
|
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