Russel says $95.5 million 10% notes tendered

New York, Feb. 23 - Russel Metals Inc. said holders tendered $95.544 million principal amount of its outstanding $115.6 million 10% senior notes due 2009 in its offer to buy the securities for cash.

Holders will receive $1,072.50 per $1,000 principal amount of notes, plus accrued and unpaid interest to but not including the settlement date, for a total purchase price of $104.65 million.

Russel added that it intends to redeem the remaining $20.056 million of the 10% notes on or soon after June 1 when they are callable at $1,050 per $1,000 principal amount plus accrued interest.

Russel Metals (B1) previously said on Feb. 6 that it and its RMI USA LLC subsidiary had received consents from the holders of a majority of their 10% notes to proposed changes in the indentures, fulfilling a key condition of their previously announced tender offer for those units.

The companies also said that they were extending the time during which holders could tender their units and receive total consideration, including a consent payment; the consent period will now coincide with the expiration of the offer, assuming all other terms and conditions are met.

The offer was scheduled to expire on Feb. 20.

Russel Metals, a Toronto-based metals distribution company, said on Jan. 23 that it and its RMI subsidiary had begun a tender offer for their $115.6 million of outstanding units, which consist of $600 principal amount of 10% senior notes due 2009 issued by Russel and $400 principal amount of 10% senior notes due 2009 issued by RMI.

The issuers said they were also soliciting consents to amend the notes' indenture to eliminate substantially all the covenants and some events of default.

Russel/RMI set a consent deadline of 5 p.m. ET on Feb. 5 (since extended) and said the tender offer would expire at 12 a.m. ET on Feb. 20, subject to possible extension.

Holders tendering their notes and delivering consents by the consent deadline would receive total consideration of $1,072.50 per unit, plus accrued interest up to but not including the settlement date. Total consideration would include a $20 per $1,000 principal amount consent payment.

Holders tendering after the consent deadline but before the expiration would receive tender offer consideration of $1,052.50 per unit, plus accrued interest up to but not including the settlement date but would not receive the consent payment.

Russel said it will use proceeds from the new notes to fund the tender offer, to repurchase its 7½% class II preferred shares, series C and its 8% subordinated debentures due June 15, 2006.

Citigroup Global Markets Inc. (800 558-3745 or collect at 212 723-6106) is the dealer manager for the offer. Global Bondholder Services Corp. (800 470-3700 or collect at 212 430-3774) is the information agent.

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