Usiminas plans consent solicitation to waive possible noncompliance

New York, Nov. 28 – Usinas Siderurgicas de Minas Gerais SA – Usiminas said it plans to carry out a consent solicitation for its $400 million of 7¼% notes due 2018 in order to waive a possible noncompliance with covenants in the indenture.

A renegotiation of the company’s debt that created a security interest over its interest in the Ipatinga hot and cold strip mills “could be viewed as noncompliance” with some of the covenants, according to a notice.

Those covenants restrict Usiminas’ ability to pledge assets as collateral.

In addition to the consent solicitation, the company plans subsequently to carry out an exchange offer for the notes. Terms and conditions for the exchange are being discussed.

As announced on Sept. 12, the company completed the renegotiation of about 92% of its total debt.

Usiminas is a Belo Horizonte, Brazil, steel company.

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