Tuesday 09 August 2016 by Alen Golubovic Company updates

IAMGOLD to raise USD200 to 230m in equity and buy back bonds

THIS CONTENT IS SUITABLE FOR WHOLESALE INVESTORS ONLY

On 8 August 2016, IAMGOLD announced an equity raising of approximately USD200m, or 38.85m common shares at a price of $5.15 per share

The underwriters also have the option to purchase up to an additional 5.8m shares to cover over-allotments up to USD30m.

IAMGOLD plans to use the net proceeds of the equity raising to strengthen its balance sheet, by reducing indebtedness, and to fund future growth. The company will use up to approximately USD150m of the net proceeds to fund its tender offer for its outstanding 6.75% bonds. The company intends to use the remainder of the net proceeds to fund internal growth projects, for future debt reduction and for general corporate purposes. The equity raising is expected to close on or about 16 August 2016.

We see this announcement as credit positive given the majority of the proceeds are being used to pay down debt. Post the equity raising and tender announcements, we expect the IAMGOLD US dollar bond price to increase.  Please check with your FIIG representative for current pricing.

Please contact your FIIG representative for further information on the IAMGOLD US dollar bond. Available to wholesale investors at a minimum face value of USD10,000.