Sibanye Gold offers $450 million six-year convertible notes to yield 1.625%-2.375%, up 30%-35%

By Stephanie N. Rotondo

Seattle, Sept. 19 – Sibanye Gold Ltd. is planning a $450 million offering of senior unsecured guaranteed convertible bonds due 2023, according to a company-issued press release.

Price talk is for a 1.625% to 2.375% yield and an initial conversion premium of 30% to 35%.

Pricing is expected on Tuesday.

Citigroup Global Markets Inc., BMO Capital Markets and RBC Capital Markets LLC are the joint global coordinators and joint bookrunners. Barclays is also participating as a bookrunner, while Mizuho International plc is acting as co-bookrunner.

Interest will be payable semiannually.

Once shareholder approval has been secured, conversions will be settled in common stock, cash or both, at the company’s option. Until approval is in hand, conversions will be settled in cash.

Additionally, so long as shareholder approval has not been received, the company reserves the right to redeem the new issue at the greater of 102% of par or 102% of fair market value.

In both cases, the redemption price will include accrued interest.

Come Oct. 17, 2020, the company can redeem the convertible bonds at any time assuming the stock hits a 260% price hurdle, or if less than 15% of the issue remains outstanding.

Proceeds will be used to refinance the outstanding portion of the bridge loan raised for the acquisition of Stillwater Mining Co.

Sibanye is a Westonaria, South Africa, gold producer.

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