Reliance subsidiary Earle M. Jorgensen sets pricing, gets required consents in tender for 9¾% notes

By Jennifer Chiou

New York, Oct. 26 - Reliance Steel & Aluminum Co. subsidiary Earle M. Jorgensen Co. said it received the required consents in its tender offer and consent solicitation for all of its $249.995 million of outstanding 9¾% senior secured notes due 2012.

As of 5 p.m. ET on Oct. 25, the consent deadline, holders of $249.7 million or 99.9% of notes tendered their holdings.

The total consideration for each $1,000 principal amount of the notes will be $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. Each will be determined based on a reference yield plus 50 basis points, less interest up to but excluding the settlement date.

The company will also pay accrued interest.

The reference yield was determined at 2 p.m. ET on Oct. 26, based on the 3 5/8% U.S. Treasury due June 30, 2007. The reference yield is 5.092% and the tender yield is 5.592%.

The total consideration includes a $20.00 consent payment for each $1,000 principal amount of notes tendered before the consent deadline.

Notes tendered after the consent deadline will receive the same amount, less the consent payment.

The company is seeking 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.

Holders may not tender their notes without submitting consents.

The offer expires at midnight ET on Nov. 8. It began on Oct. 12.

Settlement of the offer depends on receipt of consents from at least a majority of noteholders.

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

The offer will be financed with a new $1 billion credit facility that Reliance plans to arrange.

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

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