Magnesita gets tenders, consents for 76.89% of 7 7/8% notes so far

By Toni Weeks

San Luis Obispo, Calif., July 31 – Magnesita Refractories Co. said it took in tenders for $221,076,000, or 76.89%, of its outstanding 7 7/8% senior notes due 2020 by 5 p.m. ET on July 30, the early tender date for the company’s tender offer and consent solicitation, according to a company notice.

Magnesita is soliciting consents to amend the notes indenture to eliminate substantially all of the restrictive covenants, as well as various events of default and related provisions.

The proposed amendments require the consents of at least a majority of the outstanding notes, which has now been satisfied. Magnesita said it will execute the second supplemental indenture implementing the proposed amendments.

The tender offer will end at 11:59 p.m. ET on Aug. 13. Tendered notes may no longer be withdrawn.

As previously reported, the total purchase price will be par for each $1,000 principal amount, which includes a consent payment of $50, for notes tendered by the early deadline. These notes will be settled by Aug. 4, according to the notice.

Those who tender after the early tender date will receive $950 per $1,000 principal amount.

Holders also will receive accrued interest to but excluding the payment date.

Holders who tender their notes had to consent to the proposed amendments, and they could not deliver consents to the proposed amendments without tendering the related notes.

The tender offer is conditioned on the company obtaining financing with enough proceeds to fund the tender offer; however, the receipt of consents for a majority of the outstanding notes is not a condition to the offer.

Magnesita said it reserves the right to purchase the tendered notes regardless of whether the consents are received.

Banco Bradesco BBI SA (212 888-9145) and Credit Suisse Securities (USA) LLC (212 538-2147 or 800 820-1653) are the dealer managers and solicitation agents.

D.F. King & Co., Inc. (212 269-5550 or 866 387-0770) is the information agent.

Magnesita Refractories is based in York, Pa. It is a subsidiary of Magnesita Refratarios SA, a Contagem, Brazil-based supplier of refractories and minerals for the steel, cement and glass industries.

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