New Issue: Terra Capital $202 million seven-year notes yield 11 5/8%

By Paul A. Harris

St. Louis, May 16 - Terra Capital sold priced $202 million of 11½% second priority senior secured notes due June 1, 2010 (Caal/B) at 99.402 Friday to yield 11 5/8%, according to a syndicate source.

Price talk was 11½%-11¾%.

Citigroup was the bookrunner for the Rule 144A deal. Credit Suisse First Boston was co-manager.

Proceeds will be used to repay Terra's 10½% senior notes due 2005.

The company produces nitrogen products and methanol.

Issuer:	Terra Capital Inc.
Principal amount:	$202 million
Maturity:	June 1, 2010
Security description:	Second priority senior secured notes
Bookrunner:	Citigroup
Co-manager:	Credit Suisse First Boston
Coupon:	11½%
Price:	99.402
Yield:	11 5/8%
Spread:	857 basis points
Call features:	Callable on June 1, 2007 at 105.75, then at 102.875, declining to par on June 1, 2009 and thereafter
Equity clawback:	Until June 1, 2006 for 35% at 111.50
Settlement date:	May 21, 2003
Ratings:	Moody's: Caa1
	Standard & Poor's: B
Rule 144A Cusip:	88089PAC7
Price talk:	11½%-11¾%

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