Severstal begins Dutch auction tender for $500 million of two series

By Susanna Moon

Chicago, April 29 - ОАО Severstal said Steel Capital SA began modified Dutch auction tender offers for up to $500 million of two series of notes.

The company is tendering for its $500 million 6¼% loan participation notes due 2016 and $1 billion 6.7% loan participation notes due 2017.

The issuer is Steel Capital SA, a special purpose vehicle established for the purpose of issuing of debt instruments for financing loans to Severstal, according to a company press release.

Pricing will be announced on May 8, with a minimum purchase price per $1,000 principal amount of $1,022.50 for the 6¼% notes and $1,040 for the 6.7% notes.

Holders also will receive accrued interest.

The offer will end 11 a.m. ET on May 7, with settlement set for May 13.

Citigroup Global Markets Ltd. (+44 20 7986 8969, attn.: liability management group, email liabilitymanagement.europe@citi.com) and Societe Generale (+44 20 7676 7579, attn: liability management, email liability.management@sgcib.com) are the dealer managers.

Citibank NA (+44 207 508 3867, attn.: exchange team - agency and trust, or email exchange.gats@citi.com) is the tender agent.

Severstal said it will continue to consider opportunities to repurchase its debt based on borrowing costs and the overall remaining tenor of its debt portfolio.

Severstal is a steel and mining company based in Cherepovets, Russia.

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