United States Can sets pricing, extends tender for 10 7/8%, 12 3/8% notes

By Jennifer Chiou

New York, March 9 - United States Can Co. said it set pricing and extended its tender offers for its $125 million of 10 7/8% senior secured notes due 2010 and $171.71 million of 12 3/8% senior subordinated notes due 2010.

The offers now end at 5 p.m. ET on March 27 instead of 11:59 p.m. ET on March 22. United States Can said the extension will allow it to obtain financing for the offers.

For each $1,000 principal amount of 10 7/8% notes, United States Can said it will pay $1,119.60. The price for the 10 7/8% notes was set at 2 p.m. ET on March 8 using a spread of 50 basis points over the 3 5/8% U.S. Treasury notes due June 30, 2007. The total includes a $30.00 per $1,000 consent payment that will only be paid to holders who tendered by the consent deadline.

The reference yield was 4.814% and the tender offer yield was 5.314%.

The price for the 12 3/8% notes is $1,067.40 per $1,000 principal amount, which includes the $30.00 consent payment.

United States Can will also pay accrued interest up to but excluding the settlement date.

On March 3, the company said it received the required consents to eliminate substantially all of the restrictive and reporting covenants, some events of default and other provisions.

As of 5 p.m. ET on March 2, the consent deadline, the company said holders of $119.64 million or 95.71% of 10 7/8% notes and holders of $161.92 million or 94.3% of 12 3/8% notes had tendered their securities.

The tender offer and consent solicitation are being made as part of the company's merger agreement with Ball Corp. and Ball Aerosol and Special Container Corp., under which Ball Aerosol will be merged into United States Can.

United States Can had said it needed the consent of holders of at least a majority of each series of notes to amend the indentures. The tenders are subject to the necessary consents being received, the completion of the merger with Ball Aerosol and the payment in full of the indebtedness under the company's senior credit agreement.

Lehman Brother Inc. (212 528-7581 or 800 438-3242) is dealer manager. D.F. King & Co. is the information agent (212 269-5550 or 800 290-6431).

The Lombard, Ill. -based manufacturer of steel and plastic containers began the offer on Feb. 17.

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