Sirius Minerals share price: where now as $500 million junk bond launched?
The UK-based fertiliser development company kicks off its bond roadshow this week, with its success crucial to the development of its Woodsmith polyhalite mine.
Sirius Minerals kicks off its roadshow this week with the aim of attracting institutional investor interest in its $500 million high-yield bond.
The bond issuance is part of a massive $3.8 billion stage two financing plan that will provide funding for the development of its Woodsmith fertiliser mine, based near Whitby in North Yorkshire.
Junk bond’s success crucial to Sirius Minerals future
The bond prospectus received a junk bond status from ratings agencies S&P and Fitch ahead of Sirius Minerals three-week roadshow.
The FTSE 250 company is looking to attract enough buyers for its bond to unlock a $2.5 billion revolving credit facility from US-based investment bank JP Morgan.
Sirius Minerals will need to secure its financing package before the end of September or risk lacking enough funds to execute its development plans and increasing the overall value of the company’s stock.
Sirius Minerals stock likely to see gains on financing success
Many of London’s analysts expect Sirius Minerals’ stock to get a much-needed boost if it can successfully secure the financing it needs.
‘We expect the Senior Debt Event to catalyse a major re-rating of the shares, as it is in our view effectively the key to unlocking Sirius’s vast value potential,’ Shore Capital analyst Yuen Low said in a note to investors.
‘Beyond that, while Sirius would still be some years from becoming cash generative, an investment in the company should become progressively de-risked and enjoy significant value uplift as it advances towards production, we believe.’
Short-sellers have also reduced the size of their holding against the fertiliser development company, with fund mangers reducing their collective short position from 9.12% in May to 4.95%, according to data compiled by ShortTracker.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
European Central Bank meeting
Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets