Terra Capital $200 mln senior secureds talked 12½% area

By Paul A. Harris

St. Louis, Mo., Oct. 2 - Price talk puts the Terra Capital, Inc. $200 million senior secured notes (B3/BB-) due 2008 in the area of 12½%, according to a source close to the deal. Pricing is likely late Wednesday morning.

Salomon Smith Barney is the sole bookrunner, and Credit Suisse First Boston will co-manage, the source said.

The bonds are non-callable with a make-whole call, the source told Prospect News Wednesday.

Proceeds will be used to pay off the company's 10¾% notes due 2003 and also to repay existing senior secured credit facilities, according to the source, who added that Terra Capital is putting in a new revolver due 2005.

Terra Capital Inc. is a subsidiary of Sioux City, Iowa-based producer of nitrogen products and methanol, Terra Industries Inc.

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