CPPIB GOES SHOPPING

The Canada Pension Plan Investment Board did some bargain shopping in the resource sector yesterday, backstopping a $252-million (U.S.) private placement from gold play Agnico-Eagle Mines.

The CPPIB agreed to purchase a minimum of four million units in a deal that saw Macquarie Capital Markets lead a 13-dealer syndicate that sold eight million units in the mining company, with each consisting of one common share and half a warrant to purchase another share for $47.25 over the next five years.

Agnico closed at $26.18, but the stock has been at $82 in the past 12 months, and that kind of volatility makes warrants attractive.

CPPIB wasn't identified by name when Agnico-Eagle announced the financing, which will help pay for mine development, but the pension fund's role was revealed to all the investment banks working on the transaction. The $117-billion (Canadian) fund received a sweeter warrant deal in exchange for its support, which essentially amounted to a full warrant and a share in the mining company.

Back in September, Agnico-Eagle locked down a new $300-million line of credit.

See Andrew Willis's Streetwise Blog at ReportonBusiness.com