Ultrapetrol’s Stealth Convertible

Just before the Christmas break, Ultrapetrol (Bahamas) Limited announced the offering of $60 million of its 5-year convertible senior notes, with a green shoe of $10 million. The private placement priced the next day at a coupon of 7.25% and, due to investor interest, was upsized to $70 million. With the over-allotment option exercised, total gross proceeds equaled $80 million. The initial conversion rate will be 133.1691 shares of common stock per $1,000 principal amount of notes, which is equivalent to a conversion price of $7.51 per share, representing a 22.5% conversion premium over the closing pricing just prior to the announcement. Proceeds will be used to expand its PSV operations in Brazil, support the development of its river container trade, accelerate the construction of additional river barges in its Argentine shipyard and for general corporate purposes.

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