Cornerstone Chemical says $447.09 million 6¾% notes tendered in offer

By Mary-Katherine Stinson

Lexington, Ky., Feb. 15 – Cornerstone Chemical Co. reported $447,094,000, or 99.35%, of its $450 million outstanding 6¾% senior secured notes due 2024 (Cusip: 21925AAE5, U20817AC3) have been tendered by the early deadline of its private exchange offer, according to a press release.

As previously reported, Cornerstone launched the offer to exchange any and all of the notes for up to $450 million aggregate principal amount of new notes.

The early participation deadline was 5 p.m. ET on Feb. 14, which was also the withdrawal deadline.

Cornerstone is offering a total consideration of $1,000 of new notes for each $1,000 of existing notes tendered for exchange. The total consideration includes an early participation premium of $50 of new notes for each $1,000 of existing notes tendered by the early participation deadline.

Holders tendering after the early deadline will only be eligible to receive the exchange consideration of $950 of new notes per $1,000 of existing notes.

Holders whose notes are accepted for exchange will not receive any additional consideration in respect of accrued interest, additional interest or any other amount owned, the company noted.

Cornerstone also reported it received the required consents to affect some proposed amendments to the indenture governing the notes. The proposed amendments will, among other things, permit the incurrence of a new $25 million senior secured loan, the payment of a dividend to some shareholders, to release the collateral with respect to the existing notes and to eliminate substantially all of the restrictive covenants and events of default and related provisions under the indenture.

Cornerstone executed a supplemental indenture on Feb. 15 implementing the proposed amendments permitting the incurrence of the new sponsor loan and the payment of the dividend. All other proposed amendments will only become operative upon the settlement of the exchange offer, which is expected to occur on March 3.

The exchange offer and consent solicitation are conditioned on the tender of at least 75% of the aggregate principal amount of the existing notes, a condition which has now been met.

Some beneficial owners of the existing notes representing about 92% of the principal amount outstanding have entered into a transaction support agreement, agreeing to support the exchange offer and deliver consents.

The offer expires at 11:59 p.m. ET on March 1.

Based in Waggaman, La., Cornerstone is a producer of intermediate chemicals, including acrylonitrile, melamine, sulfuric acid and other products.

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