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Molycorp Prices Offerings of Convertible Senior Notes and Common Stock

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Aug. 17, 2012-- Molycorp, Inc. (NYSE: MCP) (“Molycorp” or the “Company”) today announced the pricing of its previously announced public offering of $360 million aggregate principal amount (or up to an aggregate of $414 million aggregate principal amount if the underwriters of such offering exercise their over-allotment option in full) of its 6.00% Convertible Senior Notes due 2017 (the “Notes”) (the “Notes Offering”) and 12,000,000 shares of its common stock (the “Common Stock”) (or up to an aggregate of 13,800,000 shares of Common Stock if Morgan Stanley & Co. LLC (“Morgan Stanley”), the underwriter of such offering, exercises its option to purchase additional shares of Common Stock in full) at a price per share of $10.00 (the “Primary Shares Offering”) in separate registered public offerings. The Company expects to close the Notes Offering and the Primary Shares Offering on August 22, 2012, subject to satisfaction of customary closing conditions.

The Notes will be Molycorp’s senior unsecured obligations and will bear interest at a rate of 6.00% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2013. The Notes will mature on September 1, 2017, unless earlier repurchased, redeemed or converted in accordance with their terms. The Notes will be convertible at any time prior to 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date into shares of Common Stock, cash, or a combination thereof, at Molycorp’s election. The conversion rate will initially be 83.3333 shares of Common Stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $12.00 per share of Common Stock), subject to customary adjustments. Molycorp will have the right to redeem the Notes on or after September 1, 2015 if the last reported sale price of its Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which Molycorp provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Molycorp provides notice of redemption.

The Company intends to use the net proceeds received from the Notes Offering and the Primary Shares Offering to fund operating expenses, working capital, capital expenditures and any other cash requirements for the remainder of 2012 and 2013, including without limitation, capital expenditures at its Mountain Pass facility and other capital projects, as well as other cash requirements, such as cash payments in August 2012 to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada, the Company’s wholly-owned Canadian subsidiary.

Concurrently with the Notes Offering and the Primary Shares Offering, the Company has entered into a share lending agreement with Morgan Stanley Capital Services LLC (“MSCS”), an affiliate of Morgan Stanley, under which it has agreed to loan to MSCS up to 13,800,000 shares of Common Stock (the “Borrowed Shares”), of which 7,500,000 shares of Common Stock were offered through Morgan Stanley at a price per share of $10.00 (the “Borrowed Shares Offering”) in a registered public offering. The Company has entered into the share lending agreement to facilitate the Notes Offering. The Company will not receive any proceeds from the Borrowed Shares Offering, but the Company will receive a nominal lending fee from MSCS for the use of the Borrowed Shares, which the Company intends to use for general corporate purposes.

Morgan Stanley and Credit Suisse Securities (USA) LLC are acting as joint bookrunners for the Notes Offering, and Morgan Stanley is acting as sole bookrunner for each of the Primary Shares Offering and the Borrowed Shares Offering.

Each of the Notes Offering, the Primary Shares Offering and the Borrowed Shares Offering may be made only by means of a prospectus supplement and an accompanying prospectus. Copies of the prospectus supplement and the accompanying prospectus relating to the Notes offering may be obtained from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, Second Floor, New York, NY 10014 (email address: prospectus@morganstanley.com) or Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, e-mail: newyork.prospectus@credit-suisse.com or toll free at (800) 221-1037 and copies of the prospectus supplement and the accompanying prospectus relating to the Primary Shares Offering and the Borrowed Shares Offering may be obtained from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, Second Floor, New York, NY 10014 (email address: prospectus@morganstanley.com).

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes, the Common Stock or any other securities, nor will there be any sale of the Notes, the Common Stock or any other securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted.

Source: Molycorp, Inc.

Molycorp, Inc.
Jim Sims, +1 303-843-8062
Vice President Corporate Communications
Jim.Sims@Molycorp.com
or
Brian Blackman, +1 303-843-8067
Senior Manager, Investor Relations
Brian.Blackman@Molycorp.com




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