Brazil's National Steel talks $500 million perpetual at 9 7/8% area; roadshow ends Thursday

By Paul A. Harris

St. Louis, Oct. 4 - Vicunha Acos SA/National Steel SA has talked its $500 million maximum offering of perpetual senior secured notes at the 9 7/8% area, according to a market source.

A roadshow currently in progress is expected to wrap up on Thursday.

Credit Suisse First Boston and Deutsche Bank Securities are joint bookrunners for the Regulation S-only offering.

The notes will become callable in whole only, quarterly at par beginning in October 2010.

The notes will be secured with first priority pledge on Companhia Siderurgica Nacional (CSN) common shares. The prospective issuer is pledging 18% of the outstanding common shares of CSN as security.

Standard & Poor's is expected to assign its B+ rating to the notes. Fitch is expected to rate the notes BB-.

Proceeds will be used to refinance debt.

National Steel is a holding company that is 100% indirectly controlled by Brazil's Steinbruch family and whose sole asset consists of 100% of the redeemable preferred shares of Vicunha Acos. Acos, in turn, is a holding company owning 100% of Vicunha Siderurgia SA, a holding company that owns a 42.74% controlling interest in Brazilian steel producer CSN.

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