Terra begins tender offer, consent bid for 7% senior notes due 2017

By Susanna Moon

Chicago, Sept. 24 - Terra Capital, Inc. said it launched a cash tender offer and consent solicitation for any and all of its outstanding $330 million of 7% senior notes due 2017.

Terra Capital also is soliciting consents from holders of the notes to eliminate substantially all of the restrictive covenants and events of default in the indenture. Holders cannot tender their notes without delivering their consent and vice versa.

The total payment will be $1,045 per $1,000 principal amount of the notes, including a fee of $30.00 for notes tendered by 5 p.m. ET on Oct. 7, the consent payment deadline.

The tender offer is scheduled to expire at midnight ET on Oct. 22.

Terra Capital will pay accrued interest to the payment date.

The tender offer is conditioned on receiving consents from lenders holding a majority of outstanding commitments under Terra Capital's revolving credit facility and the receipt of tenders and consents from holders of at least a majority of the notes.

Credit Suisse Securities (USA) LLC (800 820-1653 or collect 212 538-1862) is dealer manager. U.S. Bank NA is the depositary, and MacKenzie Partners, Inc. (800 322-2885 or collect 212 929-5500) is the information agent.

The issuer is a wholly owned subsidiary of Terra Industries Inc., a Sioux City, Iowa, nitrogen products company.

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