Ryerson sets talk for $575 million two-part senior secured note offering

By Paul A. Harris

St. Louis, Oct. 2 - Ryerson Inc. set price talk for its $575 million two-part offering of senior secured notes (B2/B+) on Tuesday, according to an informed source.

The Chicago-based metals processing and distribution company talked its $425 million tranche of eight-year notes, which come with four years of call protection, at the 12% area.

Meanwhile Ryerson talked its $150 million tranche of seven-year floating-rate notes at Libor plus 725 basis points. The floating-rate notes become callable in two years at 106.

The books will close at noon ET on Wednesday, except for accounts meeting with management on Wednesday. Those accounts have until 4:30 p.m. ET.

Pricing is expected at the end of the day on Wednesday.

Banc of America Securities LLC is the manager for the Rule 144A with registration rights offering.

The notes are secured by a perfected first-priority interest in real property (including owned real estate interests and equipment), capital stock, interests in joint ventures, trademarks and other tangible and intangible assets, as well as by a pledge of 65% of the interest of foreign subsidiaries. The first-priority collateral was appraised on June 30, 2007 and was valued at between $696 million and $726 million.

In addition the notes will have second-priority interest in accounts receivables and inventory.

Proceeds will be used to partially finance the acquisition of the company by Platinum Equity, LLC.

The financing also includes a $1.35 billion asset-based revolver.

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