Chemtura to spend $330 million in tender for floaters due 2010, 9 7/8% notes

New York, Nov. 30 - Chemtura Corp. said it has begun a tender offer to spend up to $330 million on buying its $225 million principal amount of senior floating-rate notes due 2010 and its outstanding 9 7/8% senior notes due 2012.

The $330 million total includes principal and debt premiums estimated at $30 million to $50 million.

The price for the floaters will be based on the remaining interest and principal payments up to the first call date of Aug. 1, 2007, discounted using 75 basis points over the bid side yield of the 3 7/8% U.S. Treasury note due July 31, 2007, excluding accrued interest. The interest rate currently in effect will be used through the first call.

For the 9 7/8% notes, the price will be the interest and principal payments to the first call date of Aug. 1, 2008, discounted using 125 basis points over the bid side yield of the 4 1/8% U.S. Treasury note due Aug. 15, 2008, excluding accrued interest.

Pricing will be set at 2 p.m. ET on Dec. 13.

Chemtura will pay accrued interest up to but excluding the settlement date, assumed to be Dec. 29.

Holders who tender by the early tender date of 5 p.m. ET on Dec. 13 will receive the full amount, which includes an early tender premium of $20 per $1,000.

The tender ends at midnight ET on Dec. 28.

The Middlebury, Conn., specialty chemicals company will pay for the tender with funds repatriated under the American Jobs Creation Act. In addition to offshore cash, it will take on $220 million of new debt at its foreign subsidiaries.

Overall the transaction will reduce overall debt by $60 million to $80 million and annual interest expense by $12 million to $14 million.

If the tender is oversubscribed, Chemtura will buy the floaters first and the 9 7/8% notes on a pro rata basis.

Morgan Stanley & Co. Inc. (800 624-1808 or 212 761-1941) and Credit Suisse First Boston LLC (800 820-1653 or 212 538-0652) are dealer managers. Global Bondholder Services Corp. is tender agent and information agent (212 430-3774 or 866 470-4200).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.