By Devika Patel
Knoxville, Tenn., Jan. 29 - China Housing & Land Development, Inc. said it will raise $20 million from a private placement of 5% five-year senior secured convertible notes.
Of the notes, $9 million are convertible into common shares and carry an initial conversion price of $5.57 per share, which can be increased if certain stock price thresholds are met.
Additionally, forced conversion can also occur if certain stock price thresholds are met.
The notes are secured by real estate assets and common shares owned by the company's chairman and chief executive officer Pingji Lu.
Investors also received 1,437,467 five-year warrants exercisable at $6.07, which are callable if certain stock price thresholds are met.
The company may redeem $11 million of the notes at par plus unpaid interest.
Merriman Curhan Ford & Co. was the financial adviser.
Proceeds will be used to fund infrastructure work and land planning expenses related to the company's Baqiao project.
Based in Xi'an, China, China Housing develops residential and commercial properties within Xi'an.
| Issuer: | China Housing & Land Development, Inc.
|
| Issue: | Senior secured convertible notes
|
| Amount: | $20 million
|
| Maturity: | Five years
|
| Coupon: | 5%
|
| Conversion price: | $5.57 (for $9 million of the notes)
|
| Warrants: | 1,437,467
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $6.07
|
| Pricing date: | Jan. 29
|
| Stock symbol: | OTCBB: CHLN
|
| Stock price: | $4.15 at close Jan. 29
|
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