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Published on 1/23/2004 in the Prospect News High Yield Daily.

Russel Metals starts tender for 10% notes

New York, Jan. 23 - Russel Metals Inc. said that it and its RMI USA LLC subsidiary have begun a tender offer for their $115.6 million of outstanding units.

Each unit is made up of $600 principal amount of 10% senior notes due 2009 issued by Russel and $400 principal amount of 10% senior notes due 2009 issued by RMI.

The issuers are also soliciting consents to amend the note indenture to eliminate substantially all the covenants and some events of default.

Holders who tender their notes and deliver consents by the consent deadline of 5 p.m. ET Feb. 5 will receive $1,072.50 per unit plus accrued interest up to but not including the settlement date.

Holders that tender after the consent deadline but before the expiration date of 12 a.m. ET Feb. 20 will receive $1,052.50 per unit plus accrued interest up to but not including the settlement date.

Russel added that it intends to call any units not tendered on or shortly after June 1 at the redemption price of $1,050.00 per unit plus accrued interest.

The tender offer is subject to various conditions including the receipt of consents necessary to amend the indenture and completion of an offering of $175 million of senior notes due 2014.

The Toronto metals distribution company will use proceeds from the new notes to fund the tender offer, to repurchase its 7.5% class II preferred shares, series C and its 8% subordinated debentures due June 15, 2006.

Citigroup Global Markets Inc. (800 558-3745 or collect at 212 723-6106) is the dealer manager for the offer. Global Bondholder Services Corp. (800 470-3700 or collect at 212 430-3774) is the information agent.


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