Lithium Americas Prices $225M (US) Notes @ $47.10 (USA)Investors pile back into hard-rock "Lithium" Spodumene developers Piedmont (PLL, share price
$57.36) and Frontier Lithium (FLL, share price ~ $
1.95)
With already a strong balance sheet and cash well over $400, Lithium Americas (LAC) will close Dec 6/21 on $225 (US) Million of Senior Convertible Note Offering:
LITHIUM AMERICAS PRICES OFFERING OF US$225 MILLION CONVERTIBLE SENIOR NOTES DUE 2027
Lithium Americas Corp. has priced its previously announced offering of $225-million (U.S.) aggregate principal amount of convertible senior notes due 2027. The company has granted the initial purchasers an overallotment option to purchase up to an additional $33.75-million (U.S.) aggregate principal amount of notes, exercisable in whole or in part at any time until 30 days after the pricing of the offering.
The notes will be unsecured and will accrue interest payable semi-annually in arrears at a rate of 1.75 per cent per annum on Jan. 15 and July 15 of each year, beginning on July 15, 2022. Prior to Oct. 15, 2026, the notes will be convertible at the option of the holders during certain periods, upon satisfaction of certain conditions. Thereafter, the notes will be convertible at any time until the close of business on the business day immediately preceding the maturity date. Upon conversion, the notes may be settled, at the company's election, in common shares of the company, cash or a combination thereof. The initial conversion rate for the notes will be 21.2307 shares per $1,000 (U.S.) principal amount of notes, equivalent to an initial conversion price of approximately $47.10 (U.S.) per share. The initial conversion price of the notes represents a premium of approximately 35 per cent to the last reported sale price of the shares on the New York Stock Exchange (the NYSE).
The company intends to use the net proceeds from the offering to repay its indebtedness, including the $205-million (U.S.) senior secured credit facility, and for general corporate purposes.
The notes will mature on Jan. 15, 2027, unless earlier repurchased, redeemed or converted. The company may not redeem the notes prior to Dec. 6, 2024, except upon the occurrence of certain changes to the laws governing Canadian withholding taxes. After Dec. 6, 2024, the company will have the right to redeem the notes as its option in certain circumstances. Holders of notes will have the right to require the company to repurchase their notes upon the occurrence of certain events.
The offering is expected to close on or about Dec. 6, 2021, subject to various closing conditions, including the approval of the Toronto Stock Exchange and the NYSE. For the purposes of TSX approvals in connection with the offering, the company intends to rely on the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply its standards to certain transactions involving eligible interlisted issuers on a recognized exchange, such as the NYSE.
The notes will be offered on a private placement basis and will not be offered by way of a prospectus in Canada, the United States or any other jurisdiction. The notes and the distribution of shares issuable upon conversion of the notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder and applicable state securities laws. The notes will be offered: (i) to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act; and (ii) outside the United States to non-U.S. persons in reliance on Rule 903 of Regulation S under the Securities Act, and, in the case of offers in Canada, to persons who are "accredited investors" and "permitted clients" within the meaning of Canadian securities laws.
About Lithium Americas Corp.
Lithium Americas is a development-stage company with projects in Jujuy, Argentina, and Nevada, United States. Lithium Americas trades on both the Toronto Stock Exchange and on the New York Stock Exchange, under the ticker symbol LAC.