International Coal tenders for all 10¼% notes, 9% convertibles

By Jennifer Chiou

New York, March 8 - International Coal Group, Inc. announced the start of two tender offers, one for any and all of its $175 million of 10¼% senior notes due 2014 and the other for any and all of its $139.5 million of 9% convertible senior notes due 2012.

The Scott Depot, W.Va.-based producer of coal is also soliciting consents to amend the indenture of the 10¼% notes.

The offer for the 10¼% notes will expire at midnight ET on April 2 while the 9% convertible offer will end at midnight ET on April 5.

In other news, the company is planning a $200 million offering of eight-year senior secured second-priority notes.

10¼% tender, solicitation

Those who tender their notes prior to 5 p.m. ET on March 19 will receive the total consideration of $1,072.50 per $1,000 principal amount of 10¼% notes, including a $30.00 consent payment.

Holders will also receive accrued interest.

The offer is conditioned on consents from holders of a majority of the notes, excluding the $11 million held by certain company affiliates, as well as sufficient financing to fund the tender.

9% convertibles offer

For each $1,000 principal amount of notes, the company will calculate the purchase price using the sum of 98.288 times the weighted average price of International Coal stock, plus $745.10, subject to a minimum purchase price of $1,064.54 and a maximum purchase price of $1,359.40.

The weighted average price will be averaged from March 8 to the pricing date.

This offer is conditioned on the company raising a minimum of $100 million in aggregate gross proceeds through a concurrent offering of common stock and $75 million via a concurrent offering of convertible notes at or prior to the end of the offer.

Holders will also receive accrued interest.

For both offers, UBS Investment Bank (888 719-4210 or call collect 203 719-4210) and Morgan Stanley (800 624-1808 or call collect 212 761-5384) are the dealer managers. D. F. King & Co., Inc. is the information agent (212 269-5550 for banks and brokers or 800 431-9633).

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