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Russia's Severstal: Chatham purchases $706.45 million 9¾% Steel Capital notes in tender offer
By Marisa Wong
Madison, Wis., Oct. 28 - In response to the tender offer for the $1.25 billion 9¾% loan participation notes due 2013 issued by Steel Capital SA to finance a loan to JSC Severstal, Chatham Enterprises Ltd. has accepted $706,448,000 of the notes for purchase, according to a news release.
The tender offer, which began on Sept. 29, expired on Oct. 27.
Chatham said that it fixed the clearing price at $1,125 per $1,000 principal amount of notes accepted for purchase.
Payment for each $1,000 principal amount of notes is determined through a modified Dutch auction.
The total consideration has been set at $1,125 per $1,000 of notes, and the tender offer consideration has been set at $1,095 per $1,000 of notes. The total consideration includes an early tender payment of $30 per $1,000 of notes.
Accrued interest to but excluding the settlement date of $24.10 per $1,000 of notes will also be paid in cash on the settlement date.
As of noon ET on Oct. 13, the early expiration deadline, holders had tendered $875.9 million of the notes.
Following settlement, which was expected to occur on Thursday, the total outstanding principal amount of the notes is expected to be $543,552,000, or about 43.5% of the total principal amount of notes at issuance.
Notes purchased in the offer will be delivered to Steel Capital and canceled.
As previously reported, the purpose of the offer and the issue of the new notes is to allow Severstal to take advantage of current favorable market conditions and extend its overall liability profile.
The dealer managers are Barclays Bank plc (+44 20 7773 8575 or eu.lm@barcap.com), Goldman Sachs International (+44 20 7774 4799 or liabilitymanagement.eu@gs.com) and Royal Bank of Scotland plc (+44 20 7085 8056 or liabilitymanagement@rbs.com).
Severstal is a Cherepovets, Russia-based steel producer.
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