MolyCorp to issue $300 million five-year convertible senior notes

By Stephanie N. Rotondo

Phoenix, Aug. 16 - MolyCorp Inc. is planning a $300 million offering of convertible senior notes due Sept. 1, 2017, the company said in a prospectus filed with the Securities and Exchange Commission on Thursday.

The company also intends to include a $45 million over-allotment option, according to a press release.

Interest will be payable on the first day of March and September, beginning March 1, 2013.

Holders of the debt can convert the notes into common stock at any time prior to 5 p.m. ET on the second scheduled trading day immediately preceding the maturity date.

The conversion rate has not yet been set.

The convertible bonds can be redeemed on of after Sept. 1, 2015 if the price of the common stock has been at 130% of the conversion price for 20 trading days within a 30-day period.

If the company undergoes a fundamental change, noteholders can force the company to buy back the notes.

The note offering is taking place concurrently with a $288 million common stock sale.

Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) Inc. are the joint bookrunners.

Proceeds will be used to fund operating expenses, working capital, capital expenditures and any other cash requirements through the first half of 2013. This includes certain cash payments on debt coming due in August due to an exercise of certain buyout and conversion rights triggered via a change of control.

MolyCorp is a Greenwood Village, Colo.-based rare earth metals exploration company.

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