ArvinMeritor sets pricing in exchange for 6.8%, 7 1/8% notes

New York, Sept. 26 - ArvinMeritor, Inc. announced pricing in its exchange offer for some of its $499 million of 6.8% senior notes due Feb. 15, 2009 and $150 million of 7 1/8% senior notes due March 15, 2009.

Payments will be as follows:

* For the 6.8% notes, the company will pay $1,019.57 per $1,000 principal amount. The total is made up of $1,000 principal amount of new notes and $20.72 in cash. Pricing was based on a yield of 6.146%;

* For the 7 1/8% notes, the company will pay $1,030.05 per $1,000 principal amount. The total is made up of $1,000 principal amount of new notes and $31.20 in cash. Pricing was based on a yield of 6.146%.

Both amounts include the early participation payment, which will only be paid to holders who tendered by 5 p.m. ET on Sept. 16.

The new notes will have a coupon of 8 1/8% and are priced at $998.85 to yield 8.143%.

Holders will also receive accrued interest up to the settlement date.

At its previous announcement on Sept. 16, ArvinMeritor upsized the exchange, saying it would now buy up to $350 million of the notes instead of the previous $300 million maximum.

As of the new early participation deadline of 5 p.m. ET on Sept. 16, $193.9 million of the 6.8% notes and $58.6 million of the 7 1/8% notes had been tendered.

The amounts were unchanged from its previous early participation deadline at 5 p.m. ET on Sept. 14.

As announced on Aug. 31, ArvinMeritor is offering cash and new 10-year notes for the existing notes.

The new senior notes will mature on Sept. 15, 2015. The coupon will be set two days before the expiration of the offer so that the price of the notes is either par or as close as possible to but below par.

ArvinMeritor will issue the same principal amount of new notes as the old notes that are accepted plus make a cash payment.

The exchange price for the old notes will be fixed using a fixed-spread formula and will be calculated at 2 p.m. ET on Sept. 26.

Those who exchanged their holdings by the extended early participation deadline will receive an early participation payment, which is included in the total set at pricing.

The offer ends at midnight ET on Sept. 28.

The Troy, Mich., auto parts maker is only making the exchange offer to institutional investors.

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