Issuance continues to surge as stocks rise, oil falls; BearingPoint wraps $40 million debenture sale

By Sheri Kasprzak

New York, July 20 - PIPE issuance volume remained firm Wednesday as stocks got a lift from largely positive economic data released by Federal Reserve chairman Alan Greenspan.

But a few sell-siders said they feel the higher volume has been expected for a while and, though the better stocks help, investor demand is the bigger culprit for the increase in offerings.

"I do think there is a big demand for these types of deals," said one sell-sider based in New York. "We've basically been expecting this kind of increase [in deal volume] for the past month or so. Naturally, it depends on the types of deals and issuer needs and all of that, but there is a bigger demand for them."

"Seems rational to me," said another sell-sider. "I think there is a demand, especially among small- to medium-sized institutions, for PIPEs. I've been hearing that we may see this level of demand for throughout the summer and into fall."

Among the sectors with the biggest demand are energy, minerals and communications, according to two market sources.

"Energy is going to be cyclical, obviously, but we're going to see a surge," said one sell-sider. "Communications, we're already seeing."

A sell-sider in Canada noted that rising mineral prices have been driving an increased interest in offerings north of the border.

Moving to specific offerings, BearingPoint, Inc. led PIPE news Wednesday with word that it sold $40 million in convertible debentures to Friedman Fleischer & Lowe LLC.

The debentures bear interest 0.5% annually, mature on July 15, 2010 and are convertible into common shares at $6.75 each. Friedman also received warrants for up to 3.5 million shares, exercisable at $8.00 each for five years.

The debentures were purchased on July 15, the same time the company received a $150 million revolving loan.

Amanda Davis, a spokeswoman for BearingPoint, did not immediately return calls requesting comment on the offering.

The company's stock did get a boost from the offering, rising $0.33, or 4.28%, to end at $8.04 after the closing was announced Wednesday morning.

BearingPoint is conducting an audit of its financial reports from March and April of this year. The company said it has experienced some discrepancies in its reporting system.

The company also reported that is second-quarter earnings statement will likely not be filed by its Aug. 9 deadline.

According to the company's last earnings statement, released on Nov. 1, 2004, the company had 199,219,295 outstanding common shares as of the date of that report.

The company reported $840.86 million in gross revenues for the quarter ended Sept. 30, 2004, up from $742.96 million for the same period in 2003.

A more recent earnings statement could not be obtained Wednesday.

Based in McLean, Va., BearingPoint is a management consulting company.

Two oil offerings close

As oil prices picked up early in the day on news that Hurricane Emily was bearing down on the Texas coast, two energy companies - one in the United States and one in Canada - announced the completion of significant deals.

Oil prices, however, retreated, dropping $0.74 to close at $56.72 per barrel as oil-supply fears eased.

BPZ Energy Inc. led the oil deals completed Wednesday with its $34,398,000 stock offering.

The Houston-based oil and natural gas exploration company sold 11,466,000 shares at $3.00 each.

"This financing provides a key part of the funding for our 2005/2006 capital program," said Randall Keys, the company's chief financial officer, in a statement. "Our capital budget for this period is $100 million, which we anticipate will be funded by the proceeds from this private placement and $70 million in financing from the IFC. We are on schedule with the IFC's appraisal process and expect to close this financing by the end of the year."

BPZ said in a release from Wednesday that it has 37,429,000 common shares currently outstanding.

According to its latest earnings report, from May, the company suffered net losses of $1,030,584 for the quarter ended March 31, 2005, up from net losses of $118,483 for the corresponding period in 2004.

Morgan Keegan & Co., Inc. was the placement agent.

BPZ's stock closed down $0.45 at $5.05 Wednesday.

Torrent Energy Corp. announced the closings of two private placements Wednesday.

The company raised $12.5 million in a convertible preferred offering and $3.3 million in a common stock deal.

Cornell Capital Partners LP bought 12,500 shares of series C convertible preferreds at $1,000 apiece.

The preferreds pay annual dividends at 5% and are convertible into common shares at the lesser of $3.00 each or 85% of the volume weighted average trading price for five trading days before conversion.

Three institutions bought 1.65 million common shares at $2.00 each, bringing in $3.3 million in proceeds for the Vancouver, B.C.-based oil and natural gas exploration company.

Proceeds from both offerings will be used to develop the company's well program in Coos Bay, Ore., and for working capital.

"We sincerely appreciate the support from our largest shareholder, and from a new fund that has taken a share portion in Torrent," said the company's chief executive officer, Mark Gustafson, in a statement. "We would also like to thank Matt Beckman and his colleagues at Cornell Capital Partners, LP for their continued financial support. Since our experience working with Cornell last August was very positive, we look forward to working with them."

Gustafson has another connection to a recent PIPE offering.

He is also president and chief executive officer of Calgary, Alta.-based Triangle Petroleum Corp., which wrapped a $5 million convertible debenture offering on Monday.

Torrent, based in Vancouver, B.C., is an oil and natural gas exploration company.

The company's stock closed up $0.17 at $2.29 Wednesday.

Higher metals, mineral prices fuel Canadian deals

Mineral and metal exploration companies dominated issuance in Canada Wednesday as the prices of some minerals and metals continue to rise.

"We're seeing prices of things like nickel and platinum up, so the sector in general, I feel, is benefiting somewhat," said one Canadian sell-sider.

Leading those deals Wednesday was a C$9.5 million unit offering from Vancouver, B.C.-based Brazauro Resources Corp.

Brazauro plans to sell up to 5 million units at C$1.90 each.

The units include one share and one half-share warrant. The whole warrants allow for the purchase of an additional share at C$3.80 each for one year.

Ocean Equities Ltd. is the placement agent.

The proceeds will be used for drilling and exploration on the Tocantinzinho and Mamoal projects in Brazil.

After the deal was announced Wednesday afternoon, Brazauro's stock closed down C$0.03 at C$1.99.

A larger deal was announced by Titanium Corp. Inc. - for C$35 million - but the company has not yet priced that deal. BMO Nesbitt Burns Inc. will be the placement agent.

Titanium is a mineral exploration company from Toronto.

Kermode Resources Ltd. and Copper Fox Metals Inc. were among the other mineral exploration companies with offerings announced Wednesday.

Teleplus Enterprises' stock slips

A day after announcing that it had received a $35 million equity line, Teleplus Enterprises Inc.'s stock dipped.

The company's stock lost $0.018 to close at $0.352 Wednesday.

After the closing was announced Tuesday, the company's stock gained a nickel to end at $0.37.

Teleplus, a Montreal-based wireless telecommunications provider, received the standby equity distribution agreement from Cornell Capital Partners LP.

Cornell will buy shares at 98% of the lowest volume weighted price for five trading days after notice of a draw.

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