Ivanhoe Mines prices US$500M convertible senior notes offering

Canadian mine developer Ivanhoe Mines Ltd. on March 11 priced a private placement offering of US$500 million principal amount of 2.50% convertible senior notes due 2026, with closing expected by March 17.

Ivanhoe also granted the initial note purchasers an option to buy up to an additional US$75 million principal amount of notes for 13 days after closing. The company plans to use the proceeds for general corporate purposes.

Ivanhoe said the notes will accrue interest payable semiannually in arrears at a rate of 2.50% per annum and will mature April 15, 2026.

The notes have an initial conversion rate of 134.5682 class A shares per US$1,000 principal amount of notes. This is equivalent to an initial conversion price of about US$7.43 per share, a 37.5% premium over Ivanhoe's last reported share price of C$6.77 per share on the Toronto Stock Exchange.

The notes will be convertible at the option of holders before Oct. 15, 2025. The notes will not be redeemable at the company's option prior to April 22, 2024.

In the fourth quarter of 2020, Ivanhoe's attributable comprehensive income increased year over year to US$33.2 million from US$25.2 million.