CitiSteel talks $170 million five-year notes at Libor plus 700-725 bps at 99.00

By Paul A. Harris

St. Louis, Aug. 16 - CitiSteel USA, Inc. talked its $170 million proceeds offering of five-year senior secured floating-rate notes at an issue price of 99.00 to pay a coupon that will float at a rate of Libor plus 700 to 725 basis points, according to an informed source.

Pricing is expected to take place late in the present week.

Jefferies & Co. has the books for the Rule 144A with registration rights issue.

The notes will contain a 75% cash flow sweep at 101. They will become callable on Sept. 1, 2006 at 103, with the call premium declining annually thereafter to 102, 101 and to par on and after Sept. 1, 2009.

Moody's Investors Service has assigned its B3 rating to the notes. The Standard & Poor's rating is CCC+.

Proceeds will be used to fund a recapitalization of the company.

CitiSteel USA is a Claymont, Del., carbon steel plate mill operator serving construction, mining, transportation and industrial manufacturing markets.

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