Renewable Energy Group Prices $125 Million in Convertible Notes

Renewable Energy Group Inc., a U.S. producer of renewable diesel from animal fats and grease, is seeking to issue $125 million in notes to refinance a credit line for a Louisiana refinery.

The convertible senior notes will pay 2.75 percent in interest and will be due in 2019, the Ames, Iowa-based company said today in a statement. Renewable Energy expects net proceeds of $120.4 million.

The company is pursuing two deals that will give it ownership of the Geismar, Louisiana, plant, which produces renewable diesel. It plans to use about $100 million from the offering to replace a letter of credit that guarantees bonds issued in connection with the facility or to redeem the bonds, according to the statement.

Renewable Energy agreed on May 21 to buy Tyson Foods Inc.’s 50 percent stake in Dynamic Fuels LLC. In December it said it would acquire Syntroleum Corp., a 50-50 joint venture between Tyson and Dynamic. Completing both purchases will give Renewable Energy Group full ownership of the refinery.

Bank of America Corp. and Wells Fargo & Co. are leading the offering, which is co-managed by Blackstone Group LP, Piper Jaffray Cos., Canaccord Genuity Group Inc. and Wedbush Securities Inc.

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