Alstom says institutions tender 70% of bonds in exchange; to issue €350 million for cash

New York, Feb. 17 - Alstom said that institutions have tendered around €650 million of the €900 million bonds covered by its exchange offer, a response of more than 70%.

The company also said that it has received more than €2 billion of demand to sell additional bonds for cash and consequently will sell the maximum €350 million allowed by the terms of the offer.

A total of €1 billion of the new bonds will be issued.

Following the institutional portion of the offer, the exchange is now open to individual investors in France, Luxembourg and Switzerland through Feb. 24.

On Feb. 16 Alstom said it had set pricing in its offer to exchange new fixed-rate bonds due 2010 for two series of outstanding bonds, its €650 million 5% bonds due July 2006 and its €250 million subordinated auction rate bonds due September 2006.

The company also set pricing for the new bonds that will be sold for cash.

The repurchase price for the 5% bonds on March 3 will be 102.661 based on a 75 basis point spread over the 2.268% yield on the 4.5% BTAN due July 12, 2006 on the pricing date. There is a further 3.0077 for accrued interest.

The repurchase price for the three-month Euribor plus 499 basis point floaters on March 3 will be 106.194 based on a 100 basis point spread over the 2.135% rate of three-month Euribor. There is a further 1.2546 for accrued interest.

The subscription price for the new bonds to be offered in the exchange and for cash is 99.829. At that price, the 6.25% bonds will yield 6.291%. Pricing was set as a 335 basis point spread over the 3% BTAN due Jan. 12, 2010.

As previously announced, the exchange is a public offer in France, in Luxembourg and (for Swiss residents) in Switzerland, and the new bonds are expected to be listed on Euronext Paris SA and on the Luxembourg Stock Exchange. The offer is not being made in the United States.

Alstom, a French-based manufacturer of power generating and transportation equipment, said that it is undertaking its exchange offer to take advantage of favorable market conditions in terms of interest rates and credit spreads, to extend the average maturity of the Alstom Group's debt.

Alstom also said that it reserved the right to issue, for cash, additional new bonds, on the same terms as the bonds being issued in the exchange offer, depending on market conditions. Such additional bonds will not be available to the public and will be issued in a private placement forming part of the same series as the new bonds issued in the exchange. Proceeds from any additional bonds will be used for general corporate purposes.

BNP Paribas (+33 1 42 98 17 90 or +44 207 595 8668) and Merrill Lynch International (+33 1 53 65 58 76 or +44 207 995 3715) are dealer managers for the bond exchange and bookrunners for the new bonds, and BNP Paribas Securities Services in Paris (+33 1 55 77 61 60) and BNP Paribas Securities Services, Luxemboug Branch (+352 2696 2549 or +352 2696 2518) will be the exchange agents.

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