Davis Polk advised Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC as joint lead and book-running managers for the initial purchasers on a Rule 144A/Regulation S offering by Molycorp, Inc. of $650 million aggregate principal amount of its 10% senior secured notes due 2020. The notes are senior secured obligations of Molycorp and guaranteed by certain of Molycorp’s subsidiaries. A substantial portion of the proceeds from the offering will be used, together with cash on hand, to finance the previously announced pending acquisition of Neo Material Technologies Inc., with the remaining proceeds to be used for general corporate purposes. Pending the consummation of the acquisition, the proceeds of the offering have been deposited and are being held in an escrow account for the benefit of the holders of the notes. If the acquisition is not consummated, the proceeds will be used to redeem the notes.
Headquartered in Greenwood Village, Colorado, Molycorp is the largest rare earth oxide producer in the Western hemisphere and owns one of the world’s largest rare earth projects outside of China. Molycorp also owns one of the largest rare earth oxides and rare metals producers in Europe, and the only producer of rare earth alloys in the United States. Upon the full execution of its ‘‘mine-to-magnets’’ strategy and completion of both phases of its modernization and expansion efforts at its Mountain Pass, California, processing facility, Molycorp expects to be one of the world’s most integrated producers of rare earth products, including oxides, metals, alloys and magnets.
The Davis Polk capital markets team included partner Michael Kaplan, counsel Jeff Ramsay, associates Peter E. Devlin and Xuelin (Steve) Wang and law clerk Tsz Hin Kwok. The credit team included partner James A. Florack and associate Shakhi Majumdar. Partner Po Sit and associates Arie Rubenstein and Una Au provided tax advice. Counsel James P. McIntyre and associates John Naughton and Joshua Erez provided real estate advice. The environmental team included counsel Hayden S. Baker and law clerk Jesse Kramer. Partner Frank J. Azzopardi and associates David R. Bauer and Bruce Rose-Innes provided intellectual property advice. Joshua Sills, Richard A. Harrison and Kathleen T. Ray were the legal assistants on the transaction. All members of the Davis Polk team are based in the New York office.
