Sherritt issues C$98.5 million 7 7/8% debentures in exchange for C$90.6 million 9 7/8% notes

By Jennifer Chiou

New York, Dec. 30 - Sherritt International Corp. said it issued C$98.525 million of 7 7/8% senior unsecured series A debentures due Nov. 26, 2012 in exchange for C$90.5672 million of its C$105 million of 9 7/8% senior unsecured notes due March 31, 2010.

The Toronto coal producer also paid accrued interest on the notes.

The remaining C$14.4328 million of 9 7/8% notes will be redeemed on Jan. 16. Sherritt will pay C$109.875 per C$100 principal amount of notes plus accrued interest up to but excluding the redemption date.

Sherritt announced the redemption of the 7 7/8% debentures on Dec. 9 and offered the exchange as an alternative.

Under the terms, the company was offering new 7 7/8% debentures for the 9 7/8% notes at a rate of C$108.787 principal amount of debentures for each C$100 principal amount of notes. The exchange amount has a market value of C$110.922 based on the 10-day average price in the over-the-counter bond market ending Dec. 8 of C$101.963 for each C$100 principal amount of new debentures.

The company said it now has C$273.525 million of 7 7/8% debentures outstanding.

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