Stone Investment gets holder approval to amend debentures, warrants

By Jennifer Chiou

New York, Aug. 11 - Stone Investment Group Ltd. announced that it has obtained approval from holders of its 9% senior secured debentures due Dec. 28, 2011 and holders of purchase warrants exercisable for Stone common shares to amend the securities' terms.

The Toronto-based wealth management company said that modifications to the debentures include:

• Changing the calculation and payment of interest after Aug. 9 to 7.5% per year, payable quarterly, and additional interest payable on Dec. 16, 2016 at 3.5% per year. It was to be calculated and payable quarterly at the rate of 11% per annum;

• Updating the interest coverage ratio so that it is calculated using quarterly interest;

• Extending the maturity date by five years to Dec. 16, 2016; and

• Granting the trustee the ability to execute agreements and documentation to give effect to an issuance of up to an additional $16 million of debentures.

Warrant amendments include:

• Increasing the number of warrants that can be issued under the indenture to 16.8 million from 7.2 million;

• Correcting certain technical deficiencies in the terms of the warrants with respect to the redemption price to match those in the prospectus dated Dec. 20, 2006;

• Granting Stone the right to repurchase the issued and outstanding warrants in tranches beginning on Jan. 1, 2012;

• Extending the warrant detachment date to Dec. 28, 2016 from Dec. 28, 2011; and

• Amending the termination date of the warrants to be 30 days following the warrant detachment date.

The company stated that holders of the debentures are entitled to 11% annualized interest from July 1 to Aug. 9 and then 7.5% from Aug. 9 until Sept. 30. The latter will be payable on Oct. 15.

Questions may be directed to Brian Edelstein (416 867-2536 or 800 336-9528; briane@stoneco.com).

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