International Specialty gets tenders for 97.5% of 10 5/8%, 98.5% of 10¼% notes

By Jennifer Chiou

New York, Feb. 16 - International Specialty Holdings Inc. said it accepted tenders from holders of $195 million or 97.5% of its $200 million of 10 5/8% senior secured notes due 2009 while subsidiaries ISP Chemco Inc., ISP Chemicals Inc., ISP Minerals Inc. and ISP Technologies Inc. accepted tenders from holders of $399 million or 98.5% of their $405 million of 10¼% senior subordinated notes due 2011.

The offers expired at 9 a.m. ET on Feb. 16.

For the 10¼% notes, holders who tendered by the consent deadline will receive $1,069.32 per $1,000 principal amount, including the $10.00 per $1,000 consent payment.

International Specialty announced the tender offers for the notes on Jan. 19. On Feb. 2, the companies also said they received the required consents in their solicitations to amend the note indentures to eliminate substantially all of the restrictive covenants and certain events of default and to modify or eliminate other provisions.

The price on offer for the 10 5/8% notes is $1,055.63 per $1,000 principal amount, which includes a $2.50 consent payment that will only be paid to holders who tender with consents by the consent deadline at 5 p.m. ET on Feb. 1.

The price for the 10¼% notes was set using a spread of 50 basis points over the 2¾% U.S. Treasury note due June 30. The total includes a $10.00 per $1,000 consent payment that will only be paid to holders who tendered by the consent deadline.

International Specialty also paid accrued interest up to but excluding the payment date.

The companies said the supplemental indentures are now operative.

The tenders were subject to the necessary consents being received and some of International Specialty's subsidiaries obtaining a new senior secured credit facility.

As part of the transactions, International Specialty Holdings intends to contribute to ISP Chemco its Synthetic Elastomers division.

UBS Securities LLC (contact liability management group at 888 722-9555 x4210) and Bear, Stearns & Co. Inc. (contact global liability management group at 877 696-2327) are dealer managers.

D.F. King & Co. is the information agent (call collect 212 269-5550 or 800 628-8536).

International Specialty is a Wayne, N.J.-based manufacturer of specialty chemicals, industrial chemicals, synthetic elastomers and mineral products.

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