Alcoa begins tender offers for up to $750 million of three note series

By Angela McDaniels

Tacoma, Wash., July 26 - Alcoa Inc. has begun two tender offers for three series of notes, according to a company news release.

In the first offer, the company will purchase any and all of its $583,467,000 principal amount of 6.5% notes due 2011.

The second offer is for the company's $516,709,000 principal amount of 6% notes due 2012 and $600 million principal amount of 5.375% notes due 2013. The maximum amount spent on this offer will be equal to $750 million minus the total purchase price of the 6.5% notes accepted in the first offer.

The maximum tender amount will be applied first to purchase 6% notes. If any is leftover, Alcoa will apply the balance to purchase 5.375% notes, subject to a sublimit of $50 million.

For each $1,000 principal amount, holders will receive $1,048.75 for the 6.5% notes and $1,042.50 for the 6% notes and 5.375% notes.

In addition, the company is offering an early tender premium of $20.00 per note in the second tender offer. The early tender date was not specified.

The company said payments for notes purchased will include accrued interest up to but excluding the settlement date.

The first tender offer will expire at 5 p.m. ET on Aug. 2. The second offer will expire at 5 p.m. ET on Aug. 23.

The tender withdrawal deadline is 5 p.m. ET on Aug. 2 for the 6.5% notes and 5 p.m. ET on Aug. 6 for the remaining notes.

The company will fund the tender offers with the proceeds of a new issue of senior debt securities together with cash on hand, as necessary. The tender offers are subject to the satisfaction of the financing condition.

Separately, Alcoa will repay its 7.375% notes due Aug. 1, 2010 at their maturity with cash on hand.

The coordinating dealer managers are Banc of America Securities LLC (980 388-9217 or 888 292-0070) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106). The co-dealer managers are Deutsche Bank Securities Inc. (212 250-2955 or 866 627-0391) and UBS Securities LLC (203 719-4210 or 888 719-4210).

The depositary and information agent in all places other than Luxembourg is Global Bondholder Services Corp. (866 804-2200). The Luxembourg agent is Deutsche Bank Luxembourg SA (00352-421-22-639).

Alcoa is a Pittsburgh-based producer of primary aluminum, fabricated aluminum and alumina.

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