Market Chatter: Bay Street Banks Stuck Holding Shares in IAMGOLD After US$300-million Bought Deal Falters

A syndicate of Bay Street underwriters is stuck with unsold shares in Canadian gold mining company IAMGOLD Corp. (IMG.TO, IAG) after they mispriced a US$300-million bought deal financing, two sources told the Globe and Mail on Friday.

A report in the newspaper noted that Toronto-based IAMGOLD announced the financing after the close on Tuesday at US$4.17 a share, a discount of 7.1% to its closing price.

It noted the bought deal was led by National Bank Financial Inc., BMO Nesbitt Burns Inc., and RBC Dominion Securities Ltd. And it also noted that in a bought deal, the company still gets the financing proceeds, regardless of whether underwriters are able to flip the shares.

Graeme Jennings, VP, investor relations with IAMGOLD said in an interview that the bought deal had closed on its end, and it had already received the funds. "We have good support for shareholders," he said. "That's really all we can comment on from our side. You'd have to talk to the brokers for their view."

The Globe reached out to the lead bankers at National, BMO, and RBC for comment but did not receive a reply.

(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)