Chattem calls floating-rate senior notes due 2010

By Angela McDaniels

Seattle, Dec. 1 - Chattem Inc. said it has called its $75 million floating-rate senior notes due 2010 for full redemption on Dec. 30.

The notes were called at 102% of par for a premium of $1.5 million.

The company said it will use borrowings under its amended revolving credit facility and cash on hand to redeem the notes.

In connection with the call of the notes, the company said it expects to record a net loss $2.9 million, or $0.10 per share, for early extinguishment of debt.

As a result of the refinancing, however, Chattem will lower its borrowing rate, generating an expected minimum net interest expense savings of about $2 million before taxes during fiscal 2006.

In addition, the debt restructuring initiative will offer greater flexibility that may result in further interest expense reductions, the company said.

Chattem is a Chattanooga, Tenn.-based marketer and manufacturer of branded over-the-counter health care products, toiletries and dietary supplements.

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