Effective yield
Denison Mines priced the upsized US $300 million 2031 convertible senior notes at roughly 99.5 % of par with a 5.75 % annual coupon. Using the issue price and the 8‑year term, the yield‑to‑maturity (effective yield) works out at about 5.9 % – a touch above the coupon because the notes trade at a slight discount to face value. For a pure‑bond comparison, this yield is comparable to senior unsecured debt of other mid‑tier junior‑miner issuers and comfortably above the “risk‑free” 10‑year Treasury rate (≈4.3 % on 13 Aug 2025), but still below the 7‑8 % yields that many high‑yield, non‑convertible mining bonds command.
Credit‑rating implications
Denison’s existing long‑term credit profile sits in the “B+” (S&P) / “B1” (Moody’s) range, reflecting the company’s exposure to uranium‑price volatility, modest cash‑flow coverage and a relatively high leverage ratio (net debt ≈ 1.3× EV). The new convertible notes are unsecured and senior, meaning they rank pari‑passu with the company’s existing senior unsecured debt. Because they are convertible, the notes carry an embedded equity upside that can dilute existing shareholders if conversion is triggered, but also improve the credit profile if the conversion price is reached and the notes are turned into equity – a scenario that would lower the company’s leverage and could prompt a rating upgrade in the next 12‑18 months. Conversely, any prolonged weakness in uranium markets would keep the “B‑” rating outlook unchanged, and the notes’ senior‑unsecured status means they will be first‑to‑default in a stress scenario, limiting upside for credit‑risk‑averse investors.
Trading take‑away
The 5.9 % effective yield is attractive relative to comparable high‑yield senior debt, while the convertible feature offers a built‑in upside if Denison’s share price climbs above the conversion price (≈ US $1.50). In a neutral‑to‑bullish uranium market, the notes can be over‑weight in a credit‑risk‑adjusted portfolio or used to structure a “convertible‑bond” play—long the notes, short the underlying equity to capture the conversion premium. In a downside scenario, the notes’ senior‑unsecured status and “B+” rating suggest they will behave like typical high‑yield bonds; a tight‑‑stop around the 95 % price level (≈ US $0.95) would protect against a rapid discounting if credit concerns intensify.