Sandvik scraps tender offer for 6.875% notes, fails to meet condition

By Susanna Moon

Chicago, Oct. 4 - Sandvik AB said it terminated the tender offer for up to €200 million of its €600 million of 6.875% notes due Feb. 25, 2014, which began on Sept. 22.

The company canceled its plans to issue new euro-denominated fixed-rate notes "due to deteriorating market conditions," according to a company press release.

The tender offer was conditioned on the issue of the new notes.

Sandvik said on Sept. 29 that it accepted tenders for €199,248,000 of 6.875% notes. As of the expiration at 11 a.m. ET on Sept. 28, noteholders had tendered €318,673,000 of the notes. Because it was more than the cap, notes were to be purchased using a pro ration factor of 0.628.

The purchase price would have been 111.376 plus accrued interest on the settlement date of Oct. 11. The interpolated mid-swap rate was set at 1.573% and the repurchase yield at 1.923% at pricing on Sept. 29.

J.P. Morgan Securities Ltd. (attn: corporate syndicate / liability management, e-mail emea-lm@jpmorgan.com / corp_syndicate@jpmorgan.com), Skandinaviska Enskilda Banken AB (attn: Niklas Lindkvist, e-mail: liabilitymanagement@seb.se) and Royal Bank of Scotland plc (attn: liability management, e-mail: liabilitymanagement@rbs.com) were the dealer managers for the tender offer and joint lead managers for the offering of the new fixed-rate notes.

Citibank, NA, London Branch (attn: exchange team - agency and trust, e-mail exchange.gats@citi.com) was the tender agent.

Sandvik AB is an engineering company based in Sandviken, Sweden.

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