6 Mar 2012capital raising announcement● NeutralMajor
Stone issued $300 million of 1.75% Senior Convertible Notes on March 6, 2012 (net proceeds about $291.1 million), sold to initial purchasers led by Barclays and Merrill Lynch. The notes are senior unsecured, guaranteed by Stone Offshore, and convert at an initial price of about $42.65 per share (23.4449 shares per $1,000), payable in cash, shares or a mix at Stone's election. Stone paid about $70.83 million for call options and received about $40.17 million for warrants, each covering about 7,033,470 shares (warrant strike $55.91); the call options are meant to reduce dilution on conversion, while the warrants could add dilution if the share price goes above $55.91. The filing text also gives the maturity as March 1, 2012 in one place, which looks like a typo for 2017 (inference; elsewhere it says 2017).