Reliance Steel subsidiary Earle M. Jorgensen buys back 99.9% of 9¾% notes

By Angela McDaniels

Seattle, Nov. 10 - Reliance Steel & Aluminum Co. said that holders tendered $249.7 million, or 99.9%, of subsidiary Earle M. Jorgensen Co.'s 9¾% senior secured notes due 2012 during a tender offer that ended on Wednesday.

The total amount paid to settle the purchase of the notes, including the consent payment and accrued and unpaid interest, was $277.8 million.

The total consideration for each $1,000 principal amount of notes was $1,069.85, which is based on the present value of the $1,048.75 redemption price on the first call date of June 1, 2007, discounted to the settlement date of the offer, plus the present value on the settlement date of interest through the first call date.

The reference yield was determined on Oct. 26 based on the 3 5/8% U.S. Treasury due June 30, 2007. The reference yield was 5.092% and the tender yield was 5.592%.

The company also paid accrued interest, and the total consideration included a $20.00 consent payment for each $1,000 principal amount of notes tendered before Oct. 25, the consent deadline. The tender offer and consent solicitation began on Oct. 12.

The company sought consents to eliminate substantially all of the restrictive covenants of the notes and certain events of default and amend other provisions, including those related to the security interest that holders have in assets of Jorgensen.

Earle M. Jorgensen and the indenture trustee executed a supplemental indenture, which became effective when the tendered notes were accepted for payment.

Reliance Steel said it used proceeds from a new $1.1 billion revolving credit facility to fund the tender consideration.

J.P. Morgan Securities Inc. (866 834-4666 or collect 212 834-4077) was the dealer manager. Global Bondholder Services Corp. (866 807-2200 or collect 212 430-3774) was the information agent and the depositary.

Reliance is a metals service company with headquarters in Los Angeles. Jorgensen supplies steel and aluminum products to manufacturing companies and is based in Lynwood, Calif.

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