ArvinMeritor sets pricing in tender, ups maximum size to $600 million notes

New York, March 13 - ArvinMeritor, Inc. announced pricing in its tender offer for its notes and increased the maximum size of the offer to $600 million from $450 million.

Including in the offer are its $200 million of its 6 5/8% notes due 2007, $100 million of its 6¾% notes due 2008, $91.4 million of its 7 1/8% notes due 2009 and $302 million of its 6.8% notes due 2009.

For the 6 5/8% notes, ArvinMeritor is offering $1,010.31 per $1,000 principal amount, including a $15.00 early tender payment, for the 6¾% notes the company is offering $1,012.75 per $1,000 principal amount, including a $30.00 early tender payment, for the 7 1/8% notes the company is offering $1,008.82 per $1,000 principal amount, including a $30.00 early tender payment and for the 6.80% notes the company is offering $999.90 per $1,000 principal amount, including a $30.00 early tender payment.

As of the early tender deadline, $192.722 million or 96.36% of the 6 5/8% notes had been tendered, $95.237 million or 95.24% of the 6¾% notes, $83.188 million or 91.02% of the 7 1/8% notes and $271.423 million or 89.88% of the 6.80% notes.

ArvinMeritor announced the offer on Feb. 27 and set a deadline of 11:59 p.m. ET on March 27, unless extended.

For the 6 5/8% notes, the company said it will pay an amount based on yield to maturity of the 3 5/8% Treasury due June 30, 2007 and 87.5 basis points, including a $15.00 early tender payment; for the 6¾% notes, using the 3 3/8% Treasury due Feb. 15, 2008 and 125 bps, including a $30.00 early tender payment; for the 7 1/8% notes, using the 2 5/8% Treasury due March 15, 2009 and 200 bps, including a $30.00 early tender payment; and for the 6.8% notes, using the 4½% Treasury due Feb. 15, 2009 and 200 bps, including a $30.00 early tender payment.

Pricing was fixed at 2 p.m. ET on March 13.

Those who tender their holdings by the early tender deadline at 5 p.m. ET on March 13 will receive the early tender payment.

If the offer is oversubscribed, ArvinMeritor will buy the 6 5/8% notes first, then the 6¾% notes, then the 7 1/8% notes and finally the 6.8% notes.

The Troy, Mich., auto parts maker also said it will pay accrued interest up to but excluding the settlement date, expected to be March 28.

UBS Investment Bank (888 722-9555 or call collect 203 719-4210), J. P. Morgan Securities Inc., Lehman Brothers Inc. and Citigroup Corporate & Investment Banking are the dealer managers. Global Bondholder Services Corp. (866 540-1500 or call collect 212 430-3774) is the information agent and depositary.

ArvinMeritor added it intends to fund the offers with cash on hand, the proceeds from the sale of its Purolator Filters business in North America and external sources, including new issues or new or existing credit facilities.

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