Koppers launches tender offer for its 9 7/8% discount notes due 2014

By Susanna Moon

Chicago, Nov. 13 - Koppers Holdings Inc. said it began a tender offer to purchase all of its outstanding 9 7/8% senior discount notes due 2014.

The tender offer will expire at midnight ET on Dec. 10.

Holders will receive $1,049.38 per $1,000 principal amount for notes tendered by 5 p.m. ET on Nov. 25, the early tender date. After that, holders will receive par.

The company also will pay accrued interest up to but not including the settlement date.

Koppers said that under the note terms, it may redeem any notes not tendered in the offer at any time after Nov. 15 at 104.938% of par, declining annually in ratable amounts until the redemption price is at par.

The company said it plans to redeem any notes that remain outstanding after the tender offer at $1,049.38 per note.

The tender offer is conditioned on the completion of a notes offering in which the company's wholly owned subsidiary, Koppers Inc., obtains debt financing yielding net proceeds, which, when paid as a dividend to Koppers Holdings, are sufficient to pay the payout to tendering holders.

Koppers Holdings also announced an expected amendment to Koppers Inc.'s and its subsidiaries credit agreement to do the following:

• Extend the expiration date of the revolving credit facility to Oct. 31, 2013;

• Increase the pricing grid by 25 basis points per level;

• Amend the maximum leverage ratio to 4.5x for 2010 to 2011 and 4x onwards;

• Eliminate the domestic interest coverage ratio;

• Include a maximum senior secured leverage ratio of 2.75x for all periods starting in the fourth quarter of 2009 and beyond; and

• Eliminate the maximum amount of obligations.

Goldman, Sachs & Co. (800 828-3182) is the dealer manager. Global Bondholder Services Corp. (866) 470-4300) is the information agent.

Koppers is a Pittsburgh-based producer of carbon compounds and treated wood products.

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