Molson Coors is looking to raise US$500m from a convertible senior note offer.

The North American brewer said yesterday (11 June) that the offer, due in 2013, will be convertible into shares of its class B common stock. Molson Coors hopes to use the majority of the net proceeds to fund a tender offer by its Coors Brewing subsidiary to buy up to $450m of its outstanding 6% senior notes due in 2012.

In addition, some of the funds will be used to pay the net cost of the convertible note hedge that it expects to enter into at the same time as the offering. The company also intends to use the remaining net proceeds of approximately $50m for voluntary funding of pension obligations.

Last month, Molson Coors posted an improved performance in the first quarter of 2007, on the back of cost reductions and increased volumes. First-quarter income from continuing operations after tax reached US$19.2m. Excluding special items, income hit $25.1m, compared with an after-tax loss of $0.4m in the first quarter 2006.