Century Aluminum starts exchange for 7.5% notes, solicits consents for 1.75% convertibles

By Jennifer Chiou

New York, Oct. 28 - Century Aluminum Co. announced the start of an exchange offer and consent solicitation for its 7.5% senior notes due 2014 as well as a consent solicitation for its 1.75% convertible senior notes due 2024.

Those who tender their 7.5% notes will receive $950 principal amount of newly issued 8% senior secured notes due May 15, 2014 for each $1,000 principal amount of notes exchanged.

According to a news release from Bracewell & Giuliani LLP, a large holder of the 7.5% notes is forming a group to consider the exchange and solicitation. Those interested in participating should contact Bracewell's Evan Flaschen (860 256-8537).

The new notes will be callable beginning on May 15, 2011 at an initial redemption price of 104 plus accrued interest. The redemption price will decline to 102 and par plus accrued interest on May 15, 2012 and May 15, 2013, respectively.

In addition, before May 15, 2011, the company may redeem up to 35% of the exchange notes with proceeds from offerings of some of Century's capital stock at 108 plus accrued interest.

In general, the covenants in the indenture governing the exchange notes will be based on those contained in the 7.5% notes' indenture, the company said in a news release.

Century is soliciting consents to amend the note indenture to eliminate most restrictive covenants and modify some events of default.

The company is offering a consent payment of $50.00 for each $1,000 principal amount of 7.5% notes.

It is seeking consents from holders of a majority of the notes.

The exchange offer and consent solicitation for the 7.5% notes will expire at 11:59 p.m. ET on Nov. 25. The consent payment deadline is 11:59 p.m. ET on Nov. 10.

1.75% notes solicitation

The company is seeking consents to modify the 1.75% notes' indenture to modify some events of default, including the exclusion of events of default relating to bankruptcies and insolvencies of its legacy domestic subsidiaries.

Century will pay a consent fee of $2.50 for each $1,000 principal amount of 1.75% notes.

The 1.75% notes' consent solicitation will expire at 11:59 p.m. ET on Nov. 10.

Globic Advisors, Inc. is the information and exchange agent (212 227-9699). Houlihan Lokey is the solicitation agent (212 497-7864).

Century is a Monterey, Calif.-based producer of primary aluminum products.

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