Osisko Development Proposes US$275M Convertible Notes to Fund Cariboo Gold Project
Osisko Development plans to issue US$275 million of convertible senior notes due 2031, including a US$25 million option, to qualified institutional buyers with an affiliate committed to US$50 million. Net proceeds will fund Cariboo Gold Project development, general corporate purposes and capped-call hedges designed to offset conversion dilution.
1. Convertible Note Offering Details
Osisko Development Corp. announced a private offering of US$225 million in convertible senior notes due 2031, with an option for purchasers to buy an additional US$25 million. Qualified institutional buyers under Rule 144A will access the Notes, and Osisko’s affiliate may acquire up to US$50 million in concurrent affiliate notes under Section 4(a)(2).
2. Allocation of Proceeds
Net proceeds are earmarked for continued development of the Cariboo Gold Project, general corporate expenses and the cost of cash-settled capped call transactions. If initial purchasers exercise their 13-day option, additional proceeds will fund supplemental capped calls and project activities.
3. Capped Call Hedging Mechanism
In conjunction with the offering, Osisko will enter capped call transactions to hedge against economic dilution from potential note conversions. These cash-settled calls cover the number of shares underlying the Notes and include anti-dilution adjustments similar to the conversion terms.
4. Potential Market and Dilution Impacts
Upon conversion, noteholders may receive cash, common shares or a combination at Osisko’s election, which could increase share count. The activities of option counterparties establishing or unwinding hedges may influence Osisko’s share trading price and conversion economics.