Chemtura sets pricing in tender for floaters due 2010, 9 7/8% notes

By Jennifer Chiou

New York, Dec. 14 - Chemtura Corp. announced it set pricing in its tender offer for its $225 million of senior floating-rate notes due 2010 and its 9 7/8% senior notes due 2012.

For each $1,000 principal amount of floaters, the company said it will pay $1,107.94 as well as $40.64 in accrued interest.

For each $1,000 principal amount of 9 7/8% notes, the company said it will pay $1,142.59 in addition to $40.60 in accrued interest.

The payouts include a $20.00 early tender premium for those who tendered their holdings before the early tender deadline of 5 p.m. ET on Dec. 13.

The company previously said it plans to spend up to $330 million in the tender, which includes principal and debt premiums estimated at $30 million to $50 million.

As of the early tender date, the company said it received tenders from holders of $60.25 million or 26.78% of its floating-rate notes and $216.06 million or 57.62% of its 9 7/8% notes.

The price for the floaters was based on the remaining interest and principal payments up to the first call date of Aug. 1, 2007, discounted using 75 basis points over the bid side yield of the 3 7/8% U.S. Treasury note due July 31, 2007, excluding accrued interest. The interest rate currently in effect will be used through the first call.

For the 9 7/8% notes, the price was based on the interest and principal payments to the first call date of Aug. 1, 2008, discounted using 125 bps over the bid side yield of the 4 1/8% U.S. Treasury note due Aug. 15, 2008, excluding accrued interest.

Pricing was set at 2 p.m. ET on Dec. 13.

Chemtura, which launched the tender on Nov. 30, said it will pay accrued interest up to but excluding the settlement date, assumed to be Dec. 29.

The tender ends at midnight ET on Dec. 28.

The Middlebury, Conn., specialty chemicals company will pay for the tender with funds repatriated under the American Jobs Creation Act. In addition to offshore cash, it will take on $220 million of new debt at its foreign subsidiaries.

Overall the transaction will reduce overall debt by $60 million to $80 million and annual interest expense by $12 million to $14 million.

If the tender is oversubscribed, Chemtura will buy the floaters first and the 9 7/8% notes on a pro rata basis.

Morgan Stanley & Co. Inc. (800 624-1808 or 212 761-1941) and Credit Suisse First Boston LLC (800 820-1653 or 212 538-0652) are dealer managers. Global Bondholder Services Corp. is tender agent and information agent (212 430-3774 or 866 470-4200).

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