U.S. Steel receives needed consents; sets pricing in tender for 10¾% notes

By Laura Lutz

Washington, Dec. 12 - United States Steel Corp. received tenders and consents from holders of a majority of its $347.75 million outstanding principal amount of 10¾% senior notes due Aug. 1, 2008 ahead of the consent deadline at 5 p.m. ET on Dec. 12.

The company also announced pricing for the offer.

For each $1,000 principal amount of notes tendered before the consent deadline, the company will pay $1,083.40. Notes tendered after the deadline will receive the same amount, less a $20 consent fee.

The payout is based on the sum of the present value of the $1,000 principal amount plus the present value of all remaining interest payments to Aug. 1, 2008, discounted using the bid-side yield of the 5% Treasury due July 31, 2008 and 50 basis points.

The reference yield was 4.715% at the pricing date, 2 p.m. ET on Dec. 12.

The consents it has received allow the company to amend the note indenture to eliminate substantially all of the restrictive covenants and certain events of default.

The offer ends at midnight ET on Dec. 27.

Currently available funds will be used for the tender.

UBS Securities LLC is the dealer manager (888 722-9555, ext. 4210 or call collect 203 719-4210). Georgeson Inc. is the information agent (866 647-8861 or call collect 212 440-9800).

U.S. Steel is a Pittsburgh steelmaker.

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