B2Gold (BTO.TO; BTG) announced it raised $225M by issuing convertible notes. The bonds have a fixed coupon of 3.25% and mature on October 1st 2018. The holder of the notes can decide to demand repayment in shares at a fixed price of $3.93/share.
B2Gold’s decision to tap into the convertible bond market is wise, as it now raised $225M at a very low interest rate. And if the notes are being converted into new shares, the dilution will be more limited than raising equity at the current share price. Should all noteholders demand repayment in shares, B2Gold will have to issue approximately 57 million new shares.
> Click here to read the press release
Disclosure: The author currently holds no position in B2Gold. Please see our disclaimer for current positions.
