Jamaica begins exchange offer for Clarendon Alumina's 8½% notes

By Angela McDaniels

Tacoma, Wash., July 31 - The Government of Jamaica began an exchange offer for the 8½% amortizing notes due 2021 issued by Clarendon Alumina Production Ltd. and guaranteed by Jamaica, according to a government news release.

In exchange for any and all of their Clarendon notes, eligible holders are being offered 8½% amortizing notes due 2021 to be issued by Jamaica.

In addition, Clarendon is soliciting consents to eliminate some covenants, change-of-control restrictions and events of default.

The exchange offer and the consent solicitation are being made in connection with a June 17 alumina sales agreement between Clarendon and Noble Resources Ltd. Under the agreement, Clarendon will provide a security interest for the 45% interest it holds in Jamalco, a joint venture with Alcoa Minerals of Jamaica, an indirect subsidiary of Alcoa Inc., for the benefit of Noble once the exchange offer and consent solicitation are completed.

The early tender date is 5 p.m. ET on Aug. 16. The exchange offer and the consent solicitation will expire at 11:59 p.m. ET on Aug. 28. The settlement date is expected to be three business days later.

In exchange for each $1,000 original principal amount of notes tended by the early tender date, Jamaica will issue $809.523810 principal amount of new notes, which reflects an exchange ratio of 100% based on the current outstanding principal amount of Clarendon notes.

In exchange for each $1,000 original principal amount of notes tended after the early tender date but prior to the offer expiration, Jamaica will issue $793.333334 principal amount of new notes, which reflects an exchange ratio of 98%.

In each case, the amount of new notes issued will be rounded down to the nearest multiple of $1.00, and no cash will be paid in lieu of notes not issued as a result of rounding.

No accrued interest will be paid on Clarendon notes accepted for exchange. Instead, the new notes will bear interest from the Clarendon notes' most recent interest payment date.

Eligible holders located in the European Economic Area must tender at least $140,000 principal amount of notes in order to participate. Based on the current amortization factor of 0.809523810, this will require holders to tender at least $173,000 original principal amount of Clarendon notes in order to participate.

Jamaica said it has obtained commitments to participate from some eligible holders, and the government holds 11.75% of the outstanding principal amount of notes and intends to tender them with consents. The Clarendon notes held by the committed eligible holders and Jamaica are more than the majority required for the approval of the proposed amendments.

The information and exchange agent is Bondholder Communications Group, LLC (212 809-2663 or 44 0 20 7382 4580). Holders who wish to participate must complete a holder eligibility letter at http://www.bondcom.com/Clarendon.

Clarendon is Jamaica's state-owned alumina producer.

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