REG to offer $125 million of convertible senior notes due 2019

June 2, 2014 |

In Iowa, the Renewable Energy Group announced that it intends to offer, subject to market and other conditions, $125 million aggregate principal amount of convertible senior notes due 2019. In connection with the offering, REG expects to grant the underwriters an option to purchase up to an additional $18.75 million aggregate principal amount of such notes to cover over-allotments, if any.

When issued, the notes will be senior unsecured obligations of REG, will pay interest semi-annually and will not be redeemable prior to maturity. Prior to December 15, 2018, the notes will be convertible only during certain periods and subject to certain circumstances, into cash, shares of REG common stock, or a combination of cash and shares of REG common stock, at REG’s election. On or after December 15, 2018, the notes will be convertible at any time. Final terms of the notes, including the interest rate, conversion rate and other terms, will be determined at the time of pricing.

REG intends to use approximately $100 million of the net proceeds from this offering to replace the letter of credit that guarantees the Gulf Opportunity Zone bonds issued in connection with the Dynamic Fuels, LLC biorefinery in Geismar, Louisiana or to redeem those bonds. REG has previously announced its agreements to acquire all of the equity interests in Dynamic Fuels from Syntroleum Corporation and Tyson Foods, Inc. REG also intends to use a portion of the net proceeds from this offering to fund the cost of the capped call transactions described below. REG intends to use the remaining net proceeds from this offering for working capital and other general corporate purposes.

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Category: Fuels

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