Gevo plans to sell $30 million 10-year convertible notes to yield 7.25%-7.75%, up 15%-20%

By Rebecca Melvin

New York, June 27 - Gevo Inc. launched an offering of $30 million of 10-year convertible senior notes that was expected to price after the market close on Thursday and was talked to yield 7.25% to 7.75% with an initial conversion premium of 15% to 20%, according to a syndicate source.

There is a $5 million greenshoe for the registered deal.

Gevo also plans to sell common stock. Neither deal is contingent upon the other.

The bonds are non-callable for three years and then provisionally callable for two years at a price hurdle of 150%. After that they are freely callable. There is an investor put in year five.

There is also a coupon make-whole feature if conversion occurs after six months, subject to a cap of four years of coupons.

Net proceeds from the offerings are earmarked to repay a portion of its outstanding long-term debt obligations, to fund the cash consideration payable to complete a retrofit of its Luverne, Minn., plant and to fund partially the Redfield Energy retrofit.

Remaining proceeds will be for working capital and for other general corporate purposes.

UBS Securities LLC and Piper Jaffray & Co. are acting as joint bookrunners for the offerings, with Robert W. Baird serving as co-manager for the common stock offering.

Gevo is an Englewood, Colo., renewable chemicals and advanced biofuels company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.