Commonwealth Bankshares wraps $19.34 million deal; volume picks up as stocks improve

By Sheri Kasprzak

Atlanta, June 28 - Commonwealth Bankshares, Inc. led private placement news in the United States with the closing of a $19,340,180 offering as volume in general picked up on higher stocks.

Commonwealth issued 967,009 shares at $20.00 each in a deal placed through agent Anderson & Strudwick, Inc.

"We deeply appreciate the strong support and confidence our new and existing shareholders have expressed in Commonwealth Bankshares through their participation in this offering," said Edward Woodard, the company's president and chief executive officer, in a statement. "We look forward to continuing to execute on a strategy we believe will enhance the long-term growth of the company and value of our stockholders."

The Norfolk, Va.-based Commonwealth Bankshares is a holding company for Bank of the Commonwealth.

The company's stock closed down $0.19 to end at $20.80 Tuesday.

In the broader market, sell-siders said a dip in oil prices may have benefited PIPE issuance Tuesday as stocks received a boost.

"Oil's coming off some highs, so we're seeing a rally of sorts," said one sell-sider. "I think there's enough demand, especially in biotech, to push some deals through."

"We've been waiting for some sort of positive movement [in stocks] for a while now," said another sell-side source. "It's finally happened. Expect to see a few more deals. I wouldn't expect a bombardment of any kind. Energy companies will obviously still push volume as a whole, so either way, there will be things out there."

The major indexes all saw gains Tuesday as oil retreated from record highs.

The Dow Jones Industrial Average gained 114.85 to close at 10,405.63; the Nasdaq composite index closed up 24.69 at 2,069.89 and the S&P 500 edged up 10.88 to close at 1,201.57.

Even though oil backed away from record highs achieved Monday, there was still enough momentum to push some significant energy offerings Tuesday.

Oil lost $2.34 to close at $58.20 per barrel.

Among the offerings introduced Tuesday was a C$20,075,000 deal from Anderson Energy Ltd.

The company announced its plans to sell 1.55 million subscription receipts at C$6.50 each and 1.25 million flow-through shares at C$8.00 each.

Once Anderson completes its acquisition of Arquest Energy Ltd., the receipts will be exchangeable for common shares on a one-for-one basis.

A syndicate of Canadian underwriters also has an over-allotment option for up to 1.55 million additional subscription receipts for additional proceeds of C$10,075,000.

The proceeds will be used to complete the acquisition, repay debt and fund exploration, development and acquisitions.

"This is another deal where there's a direct need for capital," said one market source familiar with the offering. "In other words, this company plans to acquire another company. It's been rare these days to see energy companies out looking for just working capital. I think investors are interested in these companies if they have a valid purpose for the proceeds."

Anderson is a Calgary, Alta.-based oil and natural gas exploration, development and acquisition company.

A smaller deal came from Pacific Stratus Energy Ltd. Tuesday. That company said it plans to raise C$10,625,000 in a units offering.

The deal includes 42.5 million units at C$0.25 each.

The units are comprised of one share and one half-share warrant. The whole warrants allow for the purchase of an additional share at C$0.30 each for two years.

Haywood Securities Inc. and Sprott Securities Inc. are the placement agents.

After the deal was announced Tuesday morning, the company's stock lost a penny to end at C$0.29.

Toronto-based Pacific Stratus is an oil and gas exploration company. The proceeds will be used for the development of projects in the Doima block and Ortega-Pacande oil fields in Colombia. The proceeds will also be used to advance drilling at the company's La Creciente property.

Corautus closes $17.86 million deal

Moving to the biotech sector, Atlanta-based Corautus Genetics Inc. finished a $17.86 million stock offering.

Boston Scientific Corp. and a group of private investors bought 4.7 million shares at $3.80 each. The price per share is at par with the company's closing stock price the day the deal was signed.

The proceeds from the private placement will be used for clinical trials and for operations through 2006.

"We are proud to announce such a strong showing of support and confidence by Boston Scientific and the private investors in Corautus," said Richard Otto, the company's chief executive officer, in a statement. "Boston Scientific will become our largest voting shareholder and will have provided $33 million in cash to Corautus over the past two years.

"Very importantly, with funds from these transactions, we expect to have sufficient cash to fund our projected operations through 2006, including expenditures related to the Genasis trial, the manufacturing costs for VEGF-2 for a phase III trial, and the initial costs related to conducting a planned phase III clinical trial.

"Given the current difficult capital market conditions, we are particularly gratified that our shareholders have benefited from our ability to conclude these transactions, and without issuing dilutive warrants and paying placement fees. The savings add significantly to our shareholder value and to funds available to support our clinical research initiatives."

Corautus is focused on developing treatments for cardiac diseases.

After the closing was announced Tuesday morning, Corautus's stock dipped $0.65, or 13%, to close at $4.35.

Atna Resources' C$11 million offering

Heading back to natural resources, gold exploration company Atna Resources Ltd. plans to raise C$11 million in a private placement.

The deal includes 13.75 million shares at C$0.80 each.

A portion of the deal - C$5 million - will be placed through a syndicate of placement agents led by Canaccord Capital Corp.

The agents will also have an over-allotment option for up to 1.25 million in additional shares.

"It's right in line," said one market source familiar with natural resources. "Gold has been off the past couple of days, but it's coming off of record highs."

The offering, which was announced early Tuesday, didn't affect the company's stock. It remained unchanged at C$0.78.

Based in Vancouver, B.C., Atna is a gold exploration, development and mining company. The proceeds will be used for the exploration and development of the company's properties and for working capital.

Paramount Resources stock edges up

A day after announcing its C$40,375,000 private placement, Paramount Resources Ltd.'s stock made slight gains.

The company's stock closed up C$0.07 to end at C$17.31.

On Monday, when the offering was first announced, the company's stock gained C$0.14 to close at C$17.24.

Paramount plans to sell flow-through shares at C$21.25 each.

Based in Calgary, Alta., Paramount is an oil and natural gas exploration company.

Northern Energy's stock drops

For the second day in a row, Northern Energy & Mining Inc.'s stock dropped.

The company's stock slid C$0.12, or 8%, to close at C$1.38 Tuesday.

On Monday, the company's stock closed down C$0.20, or 11.76%, to end at C$1.50 and on Friday, when the company's C$36 million private placement was first announced, the company's stock gained C$0.20 to close at C$1.70.

The Vancouver, B.C.-based coal exploration company plans to sell units of one share and one half-share warrant at C$1.80 each.

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