Commercial Metals tenders for 6½% notes, 7.35% notes by Dutch auction

By Susanna Moon

Chicago, Jan. 20 – Commercial Metals Co. said it began tender offers for up to $100 million of its outstanding 6½% senior notes due 2017 and for up to $100 million of its 7.35% senior notes due 2018.

The total purchase price for each $1,000 principal amount of notes will be calculated using a modified Dutch auction procedure with a bid price range as follows, according to a company notice:

• $1,020 to $1,060 for the $400 million of outstanding 6½% notes; and

• $1,030 to $1,070 for the $500 million of outstanding 7.35% notes.

The total amount will include an early participation payment of $30 per $1,000 principal amount of notes tendered by 5 p.m. ET on Feb. 2, the early participation date.

Those who tender after the early deadline will receive the total amount less the early premium.

The company also will pay accrued interest.

Pricing will be set using a formula consisting of a base price of $1,020 for the 2017 notes and $1,030 for the 2018 notes plus a clearing premium of up to $40.

In order to participate in the offers, holders must specify the minimum total payment, or the bid price, they would be willing to receive in exchange for each $1,000 principal amount of notes. The bid price must be in increments of $2.50 and may not be more than $40 in excess of the base price for the offer. Tenders outside the referenced range will not be accepted and will not be used for purposes of calculating the clearing premium.

The tender offers will end at 11:59 p.m. ET on Feb. 17.

Tendered notes may be withdrawn until the early tender deadline.

Neither offer is conditioned on any minimum amount of notes being tendered, nor is either offer conditioned on completion of the other offer.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745) is the dealer manager, and Global Bondholder Services Corp. (212 430-3774 or 866 807-2200) is the depositary and information agent.

Commercial Metals manufactures, recycles and markets steel and metal products as well as related materials and services and is based in Irving, Texas.

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