Horizon Lines to redeem $40.3 million 11% notes, $40 million 9% notes with IPO proceeds

New York, Sept. 28 - Horizon Lines, Inc. said it plans to redeem $40.3 million accreted value of its 11% senior discount notes due 2013 and $40 million principal amount of its 9% senior notes due 2012 with part of the proceeds of its initial public offering.

The Charlotte, N.C., container shipping and logistics company will also pay a redemption premium of $4.4 million on the discount notes and $3.6 million on the 9% notes. The figures assume a redemption date of Nov. 14.

Horizon will also use proceeds to redeem its outstanding series A preferred stock at its stated value at a total cost of $62.2 million.

Available cash up to $40 million will also be used to fund the redemption of the notes and preferreds.

Currently the company has outstanding $250 million of the 9% notes and $160 million principal amount at maturity of the discount notes. Currently $119.0 million accreted value of the discount notes is outstanding.

The $125 million initial public offering consisted of 12.5 million shares sold at $10.00 per share. Goldman, Sachs & Co. and UBS Investment Bank were joint bookrunners.

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