By Evan Weinberger
New York, Sept. 11 - Sterling Shoes Income Fund priced C$25 million in convertible unsecured subordinated debentures due Oct. 31, 2012 Tuesday. The convertibles have a 6.5% coupon and an approximately 17.8% initial conversion premium.
CIBC World Markets Inc. is lead manager of the bought deal. The convertibles are available in all provinces in Canada except Quebec through a short form prospectus. In the United States, the deal is a Rule 144A transaction. The settlement date is expected to be Oct. 3.
The convertibles have a conversion price of C$21.15 and a conversion ratio of 47.281. There is contingent conversion subject to a 125% hurdle until Oct. 31, 2011. The convertibles can be converted at any point after that until the maturity date.
Sterling Shoes is a Vancouver, B.C.-based shoe retailer. The company plans to use the proceeds to pay down existing debt, expand its retail operation and for general corporate purposes.
Issuer: Sterling Shoes Income Fund
Issue: Convertible unsecured subordinated debentures
Amount: C$25 million
Maturity: Oct. 31, 2012
Coupon: | 6.5%
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Price: | Par
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Yield: | 6.5%
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Conversion ratio: | 17.8%
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Conversion price: | C$21.15
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Conversion ratio: | 47.281
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Contingent conversion: | Until Oct. 31, 2011 subject to 125% hurdle
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Lead manager: | CIBC World Markets Inc.
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Distribution: | Through short form prospectus in Canada, Rule 144a in the United States
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