Concordia Healthcare Corp. T.CXR.R

New Debt at 9.5%? A little confused

[visionaryfool]

Just read the press release below. Didn't know they were still pricing the notes? I thought they locked in at 7.25% from their previous release. Am I missing something?

https://concordiarx.com/concordia-healthcare-announces-pricing-of-offering-of-senior-notes/

OAKVILLE, ON, Oct. 20, 2015 /CNW/ – Concordia Healthcare Corp. (“Concordia” or the “Company”) (NASDAQ: CXRX) (TSX: CXR) announced today the pricing of 9.5% Senior Notes due 2022 (the “Notes”). The principal amount of the Notes is US$790 million and the Notes were priced at an issue price of 100.0% of their face amount to yield 9.5%.

The Notes will be senior unsecured obligations of Concordia and will be guaranteed, jointly and severally, on a senior unsecured basis by certain of Concordia’s existing and future wholly-owned subsidiaries, including Amdipharm Mercury Limited (“AMCo”) and certain of its subsidiaries. The Company intends to use the net proceeds of the Notes offering to fund a portion of the purchase price and costs related to the AMCo acquisition. The completion of the Notes offering is expected to occur concurrently with the closing of the AMCo acquisition on or about October 21, 2015.

The Notes are being offered and sold in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons, including persons resident in Canada, in accordance with Regulation S under the Securities Act and other applicable securities laws.  The Notes will not be registered under the Securities Act or the securities laws of any state or any other jurisdiction and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws and foreign securities laws. Any offer or sale of the Notes in Canada will be made on a private placement basis in a manner that is exempt from the prospectus requirements of applicable Canadian securities laws.

[puma1]

the 7.25% is the average cost of capital - some lower and some higher.

[visionaryfool]

Ahh great. Thanks. I mis-read that then. Thought it was maximum. Average would make sense and explains why the stock is already up.

[sunshine7]

the interest rate on the loan in this low interest environment seems to imply risk. No one here seems to be concerned, but the lenders wanted to be paid for that risk.

[digitel]

This post has been removed in accordance with Community Policy

[sunshine7]

Thanks. Sounds like time to accumulate and be ready for short covering.

[JustforFun7]

in my opinion, 6% short interest is very little so i would not expect a big boost from short interest covering.  Trading where CXR is you have to be looking at the big picture to understand why and when the share price can increase.  No, I don't understand the big picture for this stock.  Is it guilty by association with VRX and the same reasons apply?  Is it simply big

[puma1]

the short interest at September 30th was .55% not 5% - i think someone has the decimal place in the wrong spot.

[JustforFun7]

link?  I don't see 55% short interest anywhere.   JFF7

[dudsywow]

The 9.5% rate on these unsecured bonds is slightly below where their existing 2023 notes have been trading recently (10%); so they did ok. Concordia's total debt with the term loans at Libor +4 to +4.75 is an all-in 7.25% as they announced last week.