Biofuel maker REG to sell USD 125m in notes

May 29, 2014 - US biodiesel producer Renewable Energy Group Inc (NASDAQ:REGI) said today it plans to raise USD 125 million (EUR 91.8m) through the sale of convertible senior notes due 2019.

The offering is subject to market and other conditions. The interest rate and other terms will be determined at pricing.

REG will grant the underwriters the right to buy up to an additional USD 18.75 million of notes to cover any over-allotments.

About USD 100 million from the net proceeds will replace the letter of credit that guarantees the Gulf Opportunity Zone bonds issued in connection with the Geismar renewable diesel biorefinery in the state of Louisiana. As previously announced, REG will buy the 75-million-gallon (283.9 million litres) facility from Syntroleum Corp (NASDAQ:SYNM) and Tyson Foods Inc (NYSE:TSN).

The remainder of the raised amount will be used for working capital and other general corporate purposes.

The notes will pay interest semi-annually and will not be redeemable before maturity. They will be convertible into cash, common shares or a mix of the two at REG’s election before December 15, 2018 and at any time after that date.

BofA Merrill Lynch and Wells Fargo Securities are serving as book-running managers for the offering, while Blackstone Capital Markets and Piper Jaffray & Co are co-lead managers.

(USD 1.0 = EUR 0.734)

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