Chemtrade Logistics Income Fund has announced a public offering on a “bought deal” basis, in which the company has set convertible unsecured subordinated debentures of value $65 million principal amount in the offering at the price of $1,000 per debenture. Interest rate of 8.50% per annum has been set while all these will be payable semi-annually on the last day of March and September starting by March 31, 2021. The Debentures will mature on September 30, 2025.
Chemtrade will redeem $90 million principal amount on the 5.25% convertible unsecured subordinated debentures that are to due from June 30, 2021 while the limit is set as September 30, 2020.
Chemtrade will provide 2021 Debentures holders a formal notice for redemption in accordance with trust indenture governing the 2021 Debentures terms and conditions. 2021 Debentures outstanding had the aggregate principal amount of $126.5 million at the close of August 18, 2020 trading.
The holders would be able to redeem the debentures before maturity at the Fund option amounting to $1,000 for every $1,000 principal amount of the 2021 Debentures along with accrued and unpaid interest.
The Logistic Income Fund will use the net proceeds received from the Offering along with $30 million borrowings from the Fund’s existing credit agreement to fund its Partial Redemption of the 2021 Debentures and remaining amount, if any, will be utilized for repaying of indebtedness under the Credit Facility.
Chemtrade also announced the plans to run a “at-the-market” equity program according to which it can sell units from time to time to the public that it has in its treasury.