Royal Host holders vote to extend convertibles, bump coupon to 7.5%

By Susanna Moon

Chicago, Nov. 29 - Royal Host Inc. said that holders of 74.57% of its C$45,166,000 outstanding series C convertible unsecured subordinated debentures due Sept. 30, 2013 voted to pass the amendments proposed at the meeting held Thursday.

With the amendment, the notes will be extended by five years to Sept. 30, 2018, and the coupon will be raised by 125 basis points to 7.5%, according to a company press release.

Holders also voted to reduce the conversion price of the notes to C$3.50 from C$4.87, resulting in a conversion rate of 285.714 shares per C$1,000 principal amount of the amended notes rather than 205.339 shares per C$1,000 of notes.

At the meeting, 44.31% of all the notes issued and outstanding were represented.

At Royal Host's previous announcement on Nov. 13 the company postponed the meeting from Nov. 15 and said it had improved the proposed amendment terms, including an increase of the interest rate to 7.5% instead of to 7%. The initial amended rate was announced in October.

Royal Host also further cut the conversion price to C$3.50 from C$4.87 per share, modified from the C$4.00 per share given last month. This is a conversion rate of 285.714 common shares per C$1,000 principal amount, up from the original 205.339 shares per C$1,000 principal amount.

As reported, the company is looking to amend the debentures to extend the maturity date to Sept. 30, 2018.

Royal Host said at the time that it would still pay a consent fee of C$5.00 per C$1,000 principal amount to participating holders.

The company sought consents from holders of at least two-thirds of the debentures. A quorum required holders representing at least 25% of the principal amount of the notes present at the meeting.

Halifax, N.S.-based Royal Host owns and operates hotels.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.