Merlin Diamonds Limited (ASX:MED) announced a private placement of convertible unlisted debt notes for gross proceeds of AUD 10,000,000 on November 27, 2015. The company will raise AUD 7,000,000 from institutional and wholesale investors, with the capacity to accept oversubscriptions up to an additional AUD 3,000,000. The notes will carry a 10% coupon rate payable half yearly in arrears and are convertible into ordinary shares at AUD 0.05 within the first 12 months of issuance.

The notes are secured by a charge over the assets of the company. The notes will mature in three years. The investors will receive 20 options for each AUD 1 note issued.

The options have an exercise price of AUD 0.05 per option. The company has already received subscriptions of AUD 500,000.