Rocky Mountain Dealerships tenders for all 7% convertible debentures

New York, Feb. 8 - Rocky Mountain Dealerships Inc. announced a tender offer to buy all of its C$31.5 million of 7% convertible unsecured debentures due Sept. 30, 2017.

The company is offering C$1,125 per C$1,000 principal amount plus accrued interest up to and including the purchase date.

Rocky Mountain noted that the price is a premium of C$55 to the debentures' C$1,070 closing price on the Toronto Stock Exchange on Wednesday and a C$125 premium to face value.

The company will also hold a meeting for debenture owners on March 23 in Calgary, Alta., to approve amendments to the trust indenture that will permit it to redeem within 30 days of the offer expiration any debentures not tendered. It will pay the offer price in the redemption.

Expiration for the offer will be March 30.

Funding for the tender will come from working capital and borrowings on a planned amended credit facility.

"We believe that the offer and related redemption will enhance shareholder value by reducing Rocky's overall cost of financing by refinancing the debentures with available working capital and lower-cost bank debt," said chief executive officer Matt Campbell in a news release.

Members of management owning C$672,000 of the debentures intend to vote in favor of the indenture amendment, Rocky Mountain said.

RBC Capital Markets is dealer manager.

Rocky Mountain is a Calgary-based agriculture and construction equipment dealership.

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