Aleris downsizes to $1 billion from $1.1 billion, talks two-part note offer

By Paul A. Harris

St. Louis, Dec. 11 - Aleris International Inc. has downsized to $1 billion from $1.1 billion its two-part offering of high-yield notes, market sources told Prospect News on Monday.

The Beachwood, Ohio, manufacturer of aluminum rolled products is offering $600 million of eight-year senior unsecured PIK toggle notes (B3/B-).

The toggle notes, which come with a 75 basis point PIK coupon premium and with four years of call protection, are talked at the 9% area.

Aleris is also offering $400 million of 10-year senior subordinated notes (Caa1/B-) talked at the 10% area. The subordinated note tranche was downsized from $500 million. They come with five years of call protection.

Pricing is set for Wednesday.

Deutsche Bank Securities and Goldman Sachs & Co. are joint bookrunners.

Proceeds will be used to fund Texas Pacific Group's acquisition of Aleris and to refinance $1.543 billion of existing debt.

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