Arcel Finance tenders for any and all 6.361% notes, 7.048% notes

By Jennifer Chiou

New York, March 1 - Aracruz Celulose said that its special purpose entity, Arcel Finance Ltd., started a cash tender offer for any and all of its $175 million of 6.361% senior secured notes due May 1, 2012 and any and all of its $362 million of 7.048% senior secured notes due Sept. 1, 2011.

The offer ends at 5 p.m. ET on March 8, unless extended.

For each $1,000 principal amount of 6.361% notes, the company said it will pay an amount based on the present value of remaining principal payments and interest due on the notes, discounted using the yield to maturity of the 4.5% Treasury due Feb. 15, 2009 and 80 basis points. For the 7.048% notes, the company said it will use the 45% Treasury due Feb. 15, 2009 and 75 basis points.

Pricing will be determined at 2 p.m. ET on March 6.

Citigroup Corporate & Investment Banking (800 558-3745 or call collect 212 723-6108) and J.P. Morgan Securities Inc. (866 846-2874 or call collect 212 834-7279) are joint dealer managers. The Bank of New York is the depositary D.F. King & Co., Inc. is information agent (call collect 212 269-5550 or 800 290-6427).

The Sao Paulo, Brazil, pulp producer said the purpose of the offer is to manage Aracruz's consolidated debt portfolio, reducing the amount of higher-coupon yield and less liquid debt issues.

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