By Paul A. Harris
St. Louis, June 23 - Gerdau Ameristeel Corp. priced $396.9 million proceeds of 10 3/8% senior notes due July 15, 2011 (B2/B+) at a discounted price of 98.001 on Monday to yield 10¾%, according to a syndicate source.
Price talk was for a yield in the 10% area.
JP Morgan and Banc of America Securities were joint bookrunners on the Rule 144A deal. CIBC World Markets was co-lead manager. The co-managers were Fleet Securities, TD Securities and ABN Amro.
According to an informed source the deal came with a somewhat uncharacteristic call structure in which the call features were fixed off the yield as opposed to the coupon, rendering the notes callable on July 15, 2007 at 105.375, one year later at 103.583, the following year at 101.792, and at par on July 15, 2010 and thereafter.
Proceeds will be used to repay debt.
The issuer is a Toronto minimill steel producer.
| Issuer: | Gerdau Ameristeel Corp.
|
| Amount: | $405 million face, $396.9 million proceeds
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| Maturity: | July 15, 2011
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| Security description: | Senior notes
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| Bookrunners: | JP Morgan, Banc of America Securities (joint)
|
| Joint lead manager: | CIBC World Markets
|
| Co-managers: | Fleet Securities, TD Securities, ABN Amro
|
| Coupon: | 10 3/8%
|
| Price: | 98.001
|
| Yield: | 10¾%
|
| Call features: | Callable on July 15, 2007 at 105.375, then at 103.583, 101.792, declining to par on July 15, 2010 and thereafter
|
| Settlement date: | June 27, 2003
|
| Ratings: | Moody's: B2
|
| Standard & Poor's B+
|
| Price talk: | 10% area
|
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