A.M. Castle launches exchange offer for 5%/7% PIK toggle notes

By Marisa Wong

Los Angeles, Feb. 27 – A.M. Castle & Co. announced a debt-to-equity exchange offer to de-lever its balance sheet. The company is offering to exchange its existing 5%/7% second-lien convertible PIK toggle notes due Aug. 31, 2022 into common stock and new 3%/5% second-lien convertible PIK toggle notes due Aug. 31, 2024.

Holders of about 97% of the existing 2022 notes have agreed to tender their notes in the exchange offer, according to a press release.

Based on the existing notes outstanding as of Dec. 31, full participation in the exchange offer would result in $97 million of the existing notes being exchanged into common stock and the remaining $97 million of existing notes being exchanged into the new notes due 2024, resulting in a substantial reduction in long-term debt to $166.7 million from $263.5 million and a reduction in annual interest expense by roughly $10 million on a pro forma basis.

The exchange offer is set to expire at 5 p.m. ET on March 26.

Holders will receive for each $1,000 of tendered notes $491.8619 principal amount of 3%/5% convertible PIK toggle notes due Aug. 31, 2024 and 363.2585 shares of common stock.

Accrued interest on the existing notes will be exchanged into new notes and common stock at the exchange rate on the date on which the exchange offer is completed.

Holders participating in the exchange offer will also consent to some amendments to the indenture governing the existing notes to eliminate or amend substantially all of the restrictive covenants and release all collateral securing the notes.

Holders may obtain copies of the exchange offer materials from Wilmington Savings Fund Society, FSB (fax 302 421-9137, phone 302 571-7014).

A.M. Castle is a distributor of specialty metal and plastic products, value-added services and supply-chain services and is based in Oak Brook, Ill.

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