Bayou Steel to use grace period for note payment

New York, Nov. 19 - Bayou Steel Corp. said it will use the 30-day grace period for the coupon due Nov. 15 on its 9½% senior notes.

The LaPlace, La. company said it will consider whether to make the payment before the end of the grace period.

Bayou Steel also said it is in the process of "organizing" its bondholders to discuss its financial condition. It has also been holding discussions with its credit facility lender.

"This action is designed to preserve liquidity and to ensure sufficient trade funding for ongoing operations in a period which is typically the slowest in the year at Bayou Steel's LaPlace, Louisiana and Harriman, Tennessee mills," said Jerry Pitts, Bayou's president, in a news release.

By using the grace period, Bayou Steel will preserve adequate availability on its credit line to meet its ongoing operational plan. Bayou Steel added that it is not in default of its indenture or line of credit covenants.

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