Sherritt calls 9 7/8% notes, offers to exchange for new 7 7/8% debentures

By E. Janene Geiss

Philadelphia, Dec. 9 - Sherritt International Corp. said it will redeem all of its outstanding 9 7/8% senior unsecured notes due March 31, 2010 but announced an exchange offer as an alternative for investors.

The Toronto-based coal producer will pay C$109.875 per C$100 principal amount of notes plus accrued interest up to the redemption date. Redemption is slated to occur Jan. 16, the company said.

In addition the company said it will offer to exchange the notes for new 7 7/8% senior unsecured debentures series A due Nov. 26, 2012 at a rate of C$108.787 principal amount of new debentures for each $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, 2005 of C$101.963 for each $100 principal amount of new debentures.

The price for the new bonds is subject to change prior to the effective date of the exchange.

The exchange expires Dec. 28, and noteholders can exchange their notes on a commission-free basis.

The new debentures are the same series as the C$175 million of new debentures issued Nov. 25.

National Bank Financial Inc. is the financial adviser and soliciting dealer manager for the exchange offer.

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