Molycorp Prices Offerings Of Convertible Senior Notes, Common Stock

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8/17/2012 9:26 AM ET

Molycorp Inc. (MCP: Quote) announced the pricing of its public offering of $360 million aggregate principal amount (or up to an aggregate of $414 million aggregate principal amount if the underwriters of such offering exercise their over-allotment option in full) of its 6.00% Convertible Senior Notes due 2017 and 12 million shares of its common stock (or up to an aggregate of 13.80 million shares of Common Stock if Morgan Stanley & Co. LLC, the underwriter of such offering, exercises its option to purchase additional shares of Common Stock in full) at a price per share of $10.00 in separate registered public offerings.

The company said it expects to close the Notes Offering and the Primary Shares Offering on August 22, 2012, subject to satisfaction of customary closing conditions.

The Notes will be Molycorp's senior unsecured obligations and will bear interest at a rate of 6.00% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2013. The Notes will mature on September 1, 2017, unless earlier repurchased, redeemed or converted in accordance with their terms.

The company added that it will have the right to redeem the Notes on or after September 1, 2015 if the last reported sale price of its Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days.

The company noted that it intends to use the net proceeds received from the Notes Offering and the Primary Shares Offering to fund operating expenses, working capital, capital expenditures and any other cash requirements for the remainder of 2012 and 2013, including without limitation, capital expenditures at its Mountain Pass facility and other capital projects, as well as other cash requirements, such as cash payments in August 2012 to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada, the Company's wholly-owned Canadian subsidiary.

In addition, the company said it has entered into a share lending agreement with Morgan Stanley Capital Services LLC or MSCS, an affiliate of Morgan Stanley, under which it has agreed to loan to MSCS up to 13.80 million shares of Common Stock , of which 7.50 million shares of Common Stock were offered through Morgan Stanley at a price per share of $10.00 in a registered public offering. The company has entered into the share lending agreement to facilitate the Notes Offering.

The company noted that it will not receive any proceeds from the Borrowed Shares Offering, but the Company will receive a nominal lending fee from MSCS for the use of the Borrowed Shares, which the company intends to use for general corporate purposes.

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