Leica Geosystems redeeming 9 7/8% notes

New York, May 14 - Leica Geosystems (B1/B+) said that it will redeem its €65 million of outstanding 9 7/8% notes due 2008 on June 15 at a price of 104.938% of their original principal amount. The company had originally issued €100 million of the notes in June 1999 through Leica Geosystems Finance plc.

The Heerbrugg, Switzerland-based company said that it will refinance the notes with a new four-year term loan, which at current rates will reduce Leica Geosystems' annual interest costs by CHF 6 million to CHF 7 million.

Leica Geosystems said that to refinance the 9 7/8% notes, it had concluded an agreement on May 7 with UBS AG Zurich, together with its multi-currency revolving credit facility syndicate, to extend the life of its existing CHF 150 million revolver for an additional two years, and simultaneously entered into a new CHF 80 million four-year amortizing term loan. The term loan, which is repayable in semi-annual installments beginning March 31, 2005, bears a significantly lower interest rate than the notes' 9 7/8% coupon.

The company noted that although it will have to pay an upfront premium plus transaction fees to call the notes, the affect of these one-off costs will be fully offset by lower interest costs within a year. The costs will be recorded in its results for the fiscal first quarter that ends on June 30.

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