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Teck Resources begins tender offer for up to $1 billion of 10¾% notes
By Angela McDaniels
Tacoma, Wash., Sept. 8 - Teck Resources Ltd. is offering to purchase up to $1 billion principal amount of its $1.85 billion outstanding principal amount of 10¾% senior secured notes due 2019, according to a company news release.
Holders will receive $1,257.50 for each $1,000 principal amount of notes. This includes an early tender payment of $30.00 for each note tendered by 5 p.m. ET on Sept. 21, the early tender date.
The company will also pay accrued interest up to but excluding the settlement date.
Teck expects to accept for early payment a portion of the notes that are tendered by the early tender date.
The tender offer will expire at midnight ET on Oct. 5.
The company expects to partially fund the tender offer with the proceeds of an offering of up to $700 million of senior unsecured notes due 2021 and 2040. The notes due 2040 are an add-on to the $450 million of 6% notes that were issued on Aug. 17.
The tender offer is conditioned on the consummation of the notes offering. There is no minimum tender condition.
The company said that if the tender offer is consummated, a portion of the future interest expense related to the purchased 10¾% notes, and related original issue discount and fees currently being amortized, will be charged to earnings in the quarter that the purchase is settled. If Teck purchases $1 billion of notes in the tender offer, all at the $1,257.50 price, it will record an accounting charge of approximately $370 million before tax.
The dealer managers for the tender offer are J.P. Morgan Securities LLC (866 834-4666), Banc of America Securities LLC (888 292-0070), Citigroup Global Markets Inc. (800 558-3745) and Goldman Sachs & Co. The information agent is Global Bondholder Services Corp. (866 389-1500).
Teck is a Vancouver, B.C.-based mining company with major business units focused on copper, steelmaking coal, zinc and energy.
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