Vulcan to tender for $275 million 5.6%, 6.3% notes with deal proceeds

By Toni Weeks

San Diego, May 31 - Vulcan Materials Co. said that it intends to use the proceeds from its offering of notes due 2016 and 2021 to fund a partial tender offer for up to $275 million of its 5.6% senior notes due 2012 and 6.3% senior notes due 2013 and for general corporate purposes, according to a 424B2 filing with the Securities and Exchange Commission.

The company said that as of May 31, $300 million principal amount of the 5.6% notes and $250 million principal amount of the 6.3% notes was outstanding.

Vulcan estimates it will incur a pretax charge of $25 million to $30 million due to the difference between par value and the purchase price under the tender offer as well as the non-cash write-off of previously capitalized financing costs. This charge will be recorded in the second and third quarters, with the specific charge in each quarter dependent on the settlement date under the tender offer. Interest expense will also increase by about $11 million to $14 million in the second half of the year.

The Birmingham, Ala., company produces construction aggregates, primarily crushed stone, sand and gravel.

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