Diversified Royalty Corp T.DIV

Debentures

[JayBanks]

So my understanding we are swapping new 52.5 million @ 6% with a due date of 2027 for the 57.5 million @ 5.25% that was due end of this year.

Not really a step forward but something that was needed and takes a way questions on what was gonna happen on that front, if anyone had questions on what was gonna happen with those debentures coming to term.

[dogatcat]

In a rapid rate increasing environment, that is a step forward.   

[pierrelebel]

The debentures issued in 2017 due December 2022 had a conversion price of $4.55 The new debentures carry a higher interest rate (6.00% vs 5.25%) and can be converted at a lower price of $4.05 - possible dilution down the road. I expect our shares to drop tomorrow to reflect the lower conversion rate.  It should have little effect on the long term.

[dogatcat]

I have seen debentures being tagged with  %7 plus interest rate so I think DIV fair well on a 5 year note.  

[pierrelebel]

The 2017 debentures (5.25%) have been trading around par ($100) for the last year, meaning that investors were happy to get a 5.25% return on their investment. I am puzzled that DIV management agreed to pay 6.00% to replace the 5.25%. Link to DC

[JayBanks]

  So I've never played in the debentures space so can I get a little more break down on this for information purposes... Previously in 2017 you would would pay the $1000 and get 5.25% interest per annum which would = $52.5 per year to 2022 which would be $262.5 in interest and then convert that original $1000 to shares at 4.55 = 219 shares or just take the $1000. Obviously 

[babedinkleman]

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[JayBanks]

When I seen the halt and financing headline pop up I figured that it was new financing for a deal we were making, seems like they could have made this announcement after hours and no halt needed...

[babedinkleman]

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[Shirtlessnomore]

Agree 100% .

[Shirtlessnomore]

But I guess thinking it thru a bit more as shareholders we sometimes complain with some stocks about transparency and the deal happened, they instantly reported on it so we cant ask for more than that. They have always been outstanding with updates and transparency, imo.

[dogatcat]

That was my thoughts on the financing as well.    We have to look at this as a rising rate environment.  Best to lock in at 6% and remove the finaicing uncertainty.