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Gerdau Ameristeel prices tender for Chaparral Steel 10% notes
By Susanna Moon
Chicago, Sept. 17 - Gerdau Ameristeel Corp. said it priced its cash tender offer for Chaparral Steel Co.'s 10% senior notes due 2013.
The company also said it received the required consents from the holders of $299,885,000, or 99.96, of Chaparral's 10% notes as of 5 p.m. ET on Sept. 14, the early consent date.
The company said it would pay $1,139.25 for each $1,000 principal amount of the notes tendered by the consent deadline of 5 p.m. ET on Sept. 14, including a consent fee of $30.
The payout also includes accrued interest until the settlement date.
The payout was determined as of 2 p.m. ET on Sept. 14 using the bid-side yield on the 3 5/8% U.S. Treasury note due July 15, 2009 plus 50 basis points and less accrued interest.
The yield on the reference security was 4.107% and the tender offer yield was 4.607%.
Based on the consents received, Chaparral has issued a supplemental indenture that will eliminate substantially all of the restrictive covenants and certain of the events of default, as well as modify certain other provisions.
The tender offer began on Aug. 30. The offer ends at 5 p.m. ET on Sept. 28.
As previously announced, Chaparral agreed on July 11 to be acquired by Gerdau Ameristeel for $86.00 per share in cash in a deal valued at $4.22 billion.
J.P. Morgan Securities Inc. is the dealer manager (call collect 212 270-1477). Global Bondholder Services Corp. is the information agent and depositary (call collect 212 430-3774 or 866 952-220).
Chaparral is a Midlothian, Texas-based company that produces structural steel beams and supplies steel bar products.
Gerdau Ameristeel, a subsidiary of Gerdau SA, is based in Tampa, Fla., and operates as a mini-mill steel producer through its subsidiaries.
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