Osisko Gold Royalties Ltd (TSX/NYSE: OR) has entered into an agreement with a syndicate of underwriters co-led by National Bank Financial Inc., BMO Capital Markets and Desjardins Capital Markets for a bought deal of convertible senior unsecured debentures in an aggregate principal amount of $260 million.
The offering will be comprised of $160 million public offering and a $100 million private placement.
In connection with the offering, PSP Investments has committed to purchase $100 million of debentures through the private offering on the same terms and conditions as the public offering.
The underwriters have been granted an option, exercisable in whole or in part at any time up to 48 hours prior to the closing of the private offering, to increase the size of the private offering by up to an additional $40 million.
Osisko Gold Royalties’ major shareholders include Orion Mine Finance (19.7%), Caisse de dépôt et placement du Québec (CDPQ) (12.1%), and Fonds de solidarité des travailleurs du Québec (F.T.Q.) (5.5%)
The debentures will bear interest at a rate of 4.00% per annum, payable semi-annually on June 30 and December 31 each year, commencing on June 30, 2018. The debentures will be convertible at the holder’s option into Osisko common shares at a conversion price of $22.89 per share (representing a conversion premium of approximately 40% to the reference price of $16.35 and a conversion rate of 43.6872 Osisko shares per $1,000 principal amount of debentures). The debentures will mature on December 31, 2022 and may be redeemed by Osisko, in certain circumstances, on or after December 31, 2020.
Osisko Gold Royalties intends to use net proceeds from the offering to fund the acquisition of precious metal royalties and streams, working capital, and general corporate purposes.
The offering is subject to customary regulatory and stock exchange approvals, with closing expected to occur on or about November 3, 2017.