Alstom sets pricing in exchange for 5% bonds and subordinated bonds, cash sale

New York, Feb. 16 - Alstom Group said it has set pricing in its offer to exchange new fixed-rate bonds due 2010 for two series of outstanding bonds, its €650 million 5% bonds due July 2006 and its €250 million subordinated auction rate bonds due September 2006.

The company also set pricing for the new bonds that will be sold for cash.

The repurchase price for the 5% bonds on March 3 will be 102.661 based on a 75 basis points spread over the 2.268% yield on the 4.5% BTAN due July 12, 2006 on the pricing date. There is a further 3.0077 for accrued interest.

The repurchase price for the 3-month Euribor plus 499 basis points floaters on March 3 will be 106.194 based on a 100 basis points spread over the 2.135% rate of 3-month Euribor. There is a further 1.2546 for accrued interest.

The subscription price for the new bonds to be offered in the exchange and for cash is 99.829. At that price, the 6.25% bonds will yield 6.291%. Pricing was set as a 335 basis points spread over the 3% BTAN due Jan. 12, 2010.

The exchange and subscription for new bonds is open from Feb. 17 to Feb. 24.

As previously announced, the exchange is a public offer in France, in Luxembourg and (for Swiss residents) in Switzerland, and the new bonds are expected to be listed on Euronext Paris SA and on the Luxembourg Stock Exchange. The offer is not being made in the United States.

The company said the exchange offer for institutional investors will begin at 9 a.m. CET on Feb. 8 and will run through 5 p.m. CET on Feb. 15, while the exchange offer for individual investors will begin at 9 a.m. CET on Feb. 17 and will run through 5 p.m. CET Feb. 24, with all deadlines subject to possible extension. The anticipated settlement date for the new bonds to be issued in exchange for the existing bonds is March 3.

Alstom, a French-based manufacturer of power generating and transportation equipment, said that it is undertaking its exchange offer to take advantage of favorable market conditions in terms of interest rates and credit spreads, to extend the average maturity of the Alstom Group's debt.

Alstom reserves the right to withdraw its exchange offer at the end of the offer period for institutional investors in the event that the total principal amount of existing bonds submitted for exchange by institutional investors is less than €300 million.

Alstom also said that it reserved the right to issue, for cash, additional new bonds, on the same terms as the bonds being issued in the exchange offer, depending on market conditions. Such additional bonds will not be available to the public and will be issued in a private placement forming part of the same series as the new bonds issued in the exchange. Proceeds from any additional bonds will be used for general corporate purposes.

BNP Paribas (+33 1 42 98 17 90 or +44 207 595 8668) and Merrill Lynch International (+33 1 53 65 58 76 or +44 207 995 3715) are dealer managers for the bond exchange and bookrunners for the new bonds, and BNP Paribas Securities Services in Paris (+33 1 55 77 61 60) and BNP Paribas Securities Services, Luxemboug Branch (+352 2696 2549 or +352 2696 2518) will be the exchange agents.

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