Resource News

UBS uses world demand to set price for Paladin

The sun never sets on the capital markets. At least it didn’t for Paladin Energy Ltd. earlier this year, when the TSX and ASX-listed uranium miner took advantage of “Aussie rules” to raise $430-million from global investors. Ted Larkin, right, managing director of capital markets at UBS, which was lead left on the deal, said “what we were able to demonstrate with Paladin was to basically bring global demand [for the deal], which we thought was going to be more of a price setter than domestic demand.” Mr. Larkin explains that by using the Aussie rules, a company can sell up to 15% of share capital in a private placement and there’s no hold period on it, making it a very flexible method of raising cash. They avoided using the “traditional Canadian bought deal structure, which has a longer settlement period. Most financings done outside Canada have a shorter settlement period, which is preferred by investors,” he said. The deal was launched at the close of the TSX and sold on a “24-hour book build basis,” through to Asia then marketed through the day in Europe finally ending back in North America were “we cleaned it up,” he said. Canada accounted for less than 5% of the demand, even though 45% of the company’s shares trade here. They were also able to narrow the pricing spread gap down to 6% from 8% of what the shares were trading at during marketing of the deal…read more at the Financial Post