Corus Group withdraws tender offer for 5 3/8% bonds

New York, May 14 - Corus Group plc (B3/CCC+) said that it was withdrawing its previously announced tender offer for its outstanding 5 3/8% bonds due 2006 and the related consent solicitation, as well as the company's planned offering of €500 million of new bonds due in 2011, whose proceeds would have been used to refinance its existing bonds scheduled to mature in 2006 through 2008.

Corus cited deteriorating debt market conditions. The company said it will continue to review its options for refinancing the existing 2006-2008 bonds and will keep the financial market updated "as appropriate."

As previously announced, Corus, an Anglo-Dutch steel concern, had said on April 30 that it would bring a new debt issue and would use the proceeds of the offering to reduce existing borrowings, including to finance a tender offer for the repurchase and payment of accrued interest on its outstanding 5 3/8% euro-denominated bonds. Corus had issued €400 million of the bonds in July 1999.

It had set an early tender deadline for the bonds of 4 p.m. London time on May 18 and had said the offer would expire at 4 p.m. ET on June 4.

Corus had said it would fund the tender by offering €500 million of senior notes due 2011 to certain eligible investors as part of an effort aimed at extending Corus' debt maturity profile by refinancing existing bonds maturing in the period 2006-2008.

It said the purchase price for the 5 3/8% bonds tendered by the early tender deadline would have been 102.5% of the principal amount of tendered bonds, plus accrued interest up to but excluding the expected settlement date. That total consideration was to have included an early tender payment of 1% of the principal amount.

The company said holders tendering their bonds after the early tender deadline but before the offer expires would not receive the early tender payment as part of their consideration.

The tender offer was to have been subject to the satisfaction of certain conditions, including Corus obtaining satisfactory financing and obtaining the necessary waiver from its lending banks, as well as other general conditions.

Credit Suisse First Boston (Europe) Ltd. was the dealer-manger and solicitation agent for the offer.

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