U.S. Steel tenders for 10¾% notes due 2008, calls 10% Squids due 2031

By Jennifer Chiou

New York, Nov. 29 - United States Steel Corp. announced the start of a cash tender offer for any and all of its $347.75 million of 10¾% senior notes due Aug. 1, 2008.

The Pittsburgh steelmaker is also soliciting consents to amend the note indenture to eliminate substantially all of the restrictive covenants and certain events of default.

The consent deadline is 5 p.m. ET on Dec. 12. The offer ends at midnight ET on Dec. 27.

For each $1,000 principal amount, the company will pay the sum of the present value of the $1,000 principal amount plus the present value of all remaining interest payments to Aug. 1, 2008, discounted using the bid-side yield of the 5% Treasury due July 31, 2008 and 50 basis points.

The payout includes a $20.00 consent payment for holders who tender prior to the early deadline.

UBS Securities LLC is the dealer manager (888 722-9555, ext. 4210 or call collect 203 719-4210). Georgeson Inc. is the information agent (866 647-8861 or call collect 212 440-9800).

U.S. Steel also announced the redemption of its $49,326,575 of 10% Senior Quarterly Income Debt Securities due 2031.

The company said it will redeem each Squid at par of $25.00 plus accrued interest to, but excluding, the redemption date.

The company added that interest will cease to accrue after Jan. 1.

Currently available funds will be used for both the tender and the redemption.

The Bank of New York is the trustee (800 254-2826).

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