Aperam price talk emerges; $500 million bond expected to price Friday

By Paul Deckelman

New York, March 24 - Price talk emerged on Aperam SA's $500 million two-part offering on Thursday, high-yield syndicate sources said, with pricing seen possible after the order books are closed on Friday.

They heard that the $250 million senior notes due 2016, provisionally labeled "tranche A" and carrying 2½ years of call protection, were being talked at a yield between 7¼% and 7½%.

Meantime, the "tranche B" portion of the deal, consisting of $250 million senior notes due 2018 having four years of call protection, was being talked in the 7¾% area, the sources said.

Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Goldman Sachs & Co. and ING Financial Markets LLC are the bookrunners on the deal, which surfaced on Tuesday and was being pitched to investors via a short roadshow that began on Tuesday in New York and included stops in Boston and Los Angeles.

The sources heard that the order books were closed as of 5 p.m. ET on Thursday, except for West Coast accounts. Those West Coast books are slated to close at 10 a.m. ET on Friday, with pricing seen possible after that.

The bonds are being sold under Regulation S and Rule 144A for the life of the issue, and both tranches carry a Ba1/BB+ rating.

Aperam - a Luxembourg-based stainless steel producer spun off from international steel giant ArcelorMittal earlier this year - plans to use the deal proceeds, along with cash on hand, to repay outstanding amounts under its bridge facility with its former corporate parent.

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