Vulcan Materials lifts tender cap for 6½% notes; offer oversubscribed

By Susanna Moon

Chicago, Feb. 10 - Vulcan Materials Co. said it had received tenders for $433.4 million of its 6½% senior notes due 2016; $130.1 million of its 6.4% senior notes due 2017; and $224.9 million of its 7% senior notes due 2018 by 5 p.m. ET on Feb. 7, the early tender date.

The early tendered notes will be settled on March 3.

Vulcan also lifted the tender cap for the 6½% notes and left the other tender sub-caps as well as overall offer cap unchanged in the oversubscribed offers, according to a company press release.

Because the tender offer is oversubscribed for the first-priority notes and the aggregate tender cap, the company said it expects to accept the 6½% notes on a prorated basis up to the sub-cap and to accept 6.4% notes on a prorated basis so that the aggregate principal amount of the accepted notes equals the tender cap, and no 7% notes will be accepted.

As previously announced, the company began a tender offer on Jan. 23 for up to $500 million principal amount of the three series of notes, each with a tender sub-cap, related to the sale of some assets in Florida.

The company is now tendering for up to $375 million, raised from $350 million, of its $500 million outstanding 6½% notes; $175 million of its $350 million 6.4% notes; and $125 million of its $400 million 7% notes. The notes are listed in order of priority acceptance level.

The total purchase price for each $1,000 principal amount will be $1,140 for the 6½% notes, $1,147.50 for the 6.4% notes and $1,165 for the 7% notes.

The total payment includes an early tender premium of $30 per $1,000 of notes tendered by 5 p.m. ET on Feb. 7, the early tender date. The offer began Jan. 23.

The company also will pay accrued interest to but excluding the settlement date.

Holders may continue to tender notes until 5 p.m. ET on Feb. 28.

Tendered notes may no longer be withdrawn, as of the early tender deadline.

Wells Fargo Securities (866 309-6316 or 704 410-4760 collect), US Bancorp (877 558-2607 or 612 336-7604 collect) and Goldman Sachs & Co. (800 828-3182 or 212 902-5128 collect) are the joint dealer managers. BofA Merrill Lynch and SunTrust Robinson Humphrey Inc. are the co-dealer managers. D.F. King & Co. (800 967-5079) is the tender agent and the information agent.

The tender offer is in connection with the company's sale of its cement and concrete assets in the Florida area, as previously noted.

The tender offer is not conditioned on any minimum amount of notes being tendered but is subject to completion of the Florida assets sale, with proceeds to be used to fund the offer.

Vulcan entered into a definitive agreement to sell the assets to Cementos Argos for $720 million, according to a separate press release. Vulcan is retaining all of its aggregates operations in Florida. As part of the transaction, the company has entered into a supply agreement to continue to provide aggregates to the divested concrete facilities, at market prices, for a period of 20 years. The deal is expected to close in the first quarter of 2014.

The Birmingham, Ala., company produces construction aggregates, primarily crushed stone, sand and gravel.

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