Magna Entertainment Corp. said June 24 it has completed its previously announced sale of an additional $50-million aggregate principal amount of 8.55% convertible subordinated notes due June 15, 2010.
On June 2, MEC announced the closing of the sale of the initial $100 million aggregate principal amount of the notes. Accordingly, the aggregate size of the offering is $150 million.
The notes will bear interest at 8.55% per year and will be convertible into shares of MEC's Class A subordinate voting stock at a conversion price of $7.05 per share, subject to customary antidilution adjustments. The notes will be redeemable on or after June 2, 2006.
The net proceeds to MEC from the sale of the additional notes, after the initial purchaser's commission and offering expenses are deducted, are about $48.5 million. MEC intends to use the net proceeds for general corporate purposes, including capital expenditures.