Alcoa accepts $241.92 million of 6%, 5.375% notes in tender offer

By Angela McDaniels

Tacoma, Wash., Aug. 24 - Alcoa Inc. said it received tenders for $194,854,000 of its 6% notes due 2012 and $197,159,000 of its 5.375% notes due 2013 in a tender offer that expired at 5 p.m. ET on Aug. 23.

The amounts tendered represent 37.71% of the $516,709,000 principal amount of 6% notes outstanding and 32.86% of the $600 million principal amount of 5.375% notes outstanding, according to a company news release.

As previously reported, the company began two tender offers on July 26 for three series of notes.

In the first offer, the company offered to purchase any and all of its $583,467,000 principal amount of 6.5% notes due 2011. Investors tendered $253,412,000 of notes in that offer, which ended Aug. 2.

The second offer was for the 6% notes and 5.375% notes. Alcoa offered to spend up to $484,234,165 on this offer, which is $750 million minus the total purchase price of the 6.5% notes accepted in the first offer.

In accordance with the terms of the tenders offers, Alcoa applied the maximum tender amount first to purchase 6% notes and applied the balance to purchase 5.375% notes, subject to a sublimit of $50 million on the 5.375% notes.

Accordingly, all of the tendered 6% notes were accepted, and $47,067,000 principal amount of the 5.375% notes were accepted on a pro rata basis.

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

Holders who tendered their 6% notes or 5.375% notes prior to 5 p.m. ET on Aug. 6 will receive an additional $20.00 per note as an early tender premium.

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

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 coordinating dealer managers were 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 were 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 was Global Bondholder Services Corp. (866 804-2200). The Luxembourg agent was 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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