By Paul A. Harris
St. Louis, May 4 - Mandra Forestry Holdings Ltd. priced a downsized and restructured $195 million issue of eight-year senior notes (B1/B) with warrants at par to yield 12%, according to an informed source.
Price talk was in the 12% area with warrants.
Morgan Stanley ran the books for the Rule 144A/Regulation S offering.
Attached to the notes are 20% warrants for common shares, which are detachable immediately.
In addition, the notes contain a cash flow sweep provision of 100% of the company's free cash flow, giving investors the option of putting the bonds at 102 in May 2007, in the event that the company has sufficient free cash.
Also if Mandra fails to secure 140,000 hectares of the plantation property during the first two years, investors will get immediate access to an escrow account balance.
The bond comes with five years of call protection.
Previously Mandra had been in the market with a 10-year bullet.
The issue size was decreased from $235 million.
Proceeds will be used to fund the acquisition of commercial plantations in Anhui Province, China.
Mandra is based in Hong Kong.
| Issuer: | Mandra Forestry Holdings Ltd.
|
| Amount: | $195 million (decreased from $235 million)
|
| Maturity: | May 15, 2013 (restructured from 10-year tenor)
|
| Security description: | Senior notes
|
| Bookrunner: | Morgan Stanley
|
| Coupon: | 12%
|
| Warrants: | 20% warrants at $0.10 per warrant, detachable immediately
|
| Cash sweep: | 102 cash sweep of 100% of free cash flow at investors' option starting in May 2007
|
| Price: | Par
|
| Yield: | 12%
|
| Call features: | Callable after May 15, 2010 at 106, 103, 101.50, par (restructured from non-call-life)
|
| Trade date: | May 4
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| Settlement date: | May 11
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| Acquisition trigger: | If Mandra fails to secure 140,000 hectares of the plantation property during the first two years, investors get immediate access to escrow account balance
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B
|
| Price talk: | 12% area with warrants
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