Metso receives tenders of €256 million 6¼% notes in exchange

New York, Nov. 12 - Metso Corp. said it received tenders of €256.1 million in its exchange offer for its 6¼% eurobonds due 2006 under its exchange offer for the securities.

As a result, the company will issue €274.2 million of new 5 1/8% notes due Nov. 21, 2011.

The response is 62.2% of the existing notes.

Because of the response, Metso will not be issuing any of the new notes for cash.

On Nov. 8 Metso announced pricing on the exchange, saying the spread would be 55 basis points over the 4.5% OBL due Aug. 18, 2006, while the spread for new bonds will be 165 basis points over the seven-year mid-swap rate.

Metso announced on Oct. 29 that it was offering new euro-denominated fixed-rate notes due 2011 in an exchange for its existing 6¼% eurobonds.

The Helsinki, Finland-supplier of process industry machinery said the transaction will further reduce its refinancing requirements for 2006 and offer investors the chance to stay invested in the credit.

Currently there is €412 million of the 6¼% notes outstanding.

It said pricing of the exchange will be based on a spread of 50 to 60 basis points over the 4.5% OBL due Aug. 18, 2006.

Initial price communication for the new notes started on Nov. 3, with the final spreads being fixed on Nov. 8.

The exchange expires at 3 p.m. CET on Nov. 11, and pricing is at 1 p.m. CET on Nov. 12. Settlement is scheduled for Nov. 19.

The exchange is subject to at least €175 million of the existing notes being accepted.

Metso said it may also issue additional new notes for cash. It is aiming at a size of €250 million for the new bond.

Deutsche Bank (liability manager group +44 20 7545 8011) and Merrill Lynch (liability manager group +44 20 7995 3715) are dealer managers with Citibank, Nordea and Skandinaviska Enskilda Banken as co-dealer managers. Citibank is exchange agent.

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