New Gold's $400 Million Senior Notes Offering: A Strategic Debt Refinancing Move

New Gold Inc. (TSX: NGD) (NYSE American: NGD) has announced the launch of a $400 million Senior Notes offering, aiming to fund a tender offer for its outstanding 7.50% Senior Notes due 2027. This strategic move by New Gold is expected to have significant implications for its capital structure and debt maturity profile.



The offering of $400 million aggregate principal amount of Senior Notes will be used to fund the purchase of any and all of New Gold's outstanding 7.50% senior notes due 2027, as well as to pay related fees and expenses. The company also intends to use the remainder of the net proceeds, if any, to redeem any Existing Notes remaining outstanding following the Tender Offer at 100% of the principal amount thereof on or about July 15, 2025.

New Gold has also commenced a tender offer to purchase for cash any and all of the Existing Notes, subject to certain conditions, including the successful completion of the offering of the Notes. The offering of the Notes is not conditional upon any minimum principal amount of Existing Notes being tendered and purchased in the Tender Offer.

The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The Notes will be offered and sold in Canada on a private placement basis pursuant to certain prospectus exemptions.

The successful execution of this refinancing initiative will depend on market reception to the new notes offering, which targets qualified institutional buyers and non-U.S. persons. The transaction structure - using proceeds plus cash on hand - suggests management's confidence in both their ability to place the new notes and the company's liquidity position.

In conclusion, New Gold's $400 million Senior Notes offering is a strategic debt refinancing move that maintains the company's debt level while potentially extending its maturity profile and altering its interest expense structure. This transaction demonstrates proactive liability management, addressing debt obligations well ahead of their maturity date. The success of this refinancing initiative will depend on market reception to the new notes offering and the company's ability to execute the tender offer for its outstanding 7.50% senior notes.