International Coal Group eight-year deal downsized, talked at 9 ¾%-to-10%

By Paul Deckelman

New York, June 19 - International Coal Group Inc.'s planned offering of eight-year senior notes was heard by high-yield syndicate sources Monday to have been sharply downsized to $175 million, well down from original expectations of $250 million.

The sources also said that pre-deal market price talk anticipating a yield between 9¾% and 10% emerged Monday. The notes are expected to price early Tuesday afternoon, after the books close at 11 a.m. ET.

The deal is being brought to market via joint book-running managers UBS Investment Bank, JP Morgan Securities and Goldman Sachs & Co., as well as co-managers Banc of America Securities and Wachovia Securities. The deal has been marketed to potential investors through a roadshow which began June 12 and which is scheduled to wrap up Tuesday morning.

The notes, which are being sold under Rule 144A with registration rights, are non-callable for the first four years after issue.

The Ashland, Ky.-based coal producer plans to use the proceeds of the offering to repay debt, including its revolver and its term loan debt, as well as funding future capital spending, and for general corporate purposes.

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