28 Oct 2010 15:32

Severstal buying back $706 mln in 2013 LPN

MOSCOW. Oct 28 (Interfax) - Severstal is buying back $706 million in loan participation notes (LPN) maturing in 2013, the company said in a statement.

The purchaser, which is Chatham Enterprises Limited, accepted for purchase $706.448 million of the outstanding $1.25 million 9.75% LPN due 2013 by the offer expiry date of October 27, the statement says.

Severstal placed $1 billion in new seven-year LPN at a coupon rate of 6.7% annually in the middle of October under an overall $3-billion LPN program.

Severstal said on September 30 that it would buy back up to 36% of $450 million worth of its $1.25 billion in 9.75%-LPN maturing in 2013, and that the offer was conditional on the issue of new USD-denominated bond financing, on terms satisfactory to Severstal. It said it might buy the notes, face value $1,000 each, for $1,097.5-$1,127.5 each.

But the company said on October 14 that it intended to buy back $700 million in 2013 notes at face value. It said Chatham Enterprises Limited, which announced the tender on Severstal's behalf, had received applications from investors to buy back $875.9 million in notes.

Based on prices specified by noteholders in the tender instructions received as of the early expiration deadline of October 13, the clearing price would be $1,125 per note.

Severstal could spend $795 million buying up the $706.45 million.

Barclays Bank, Goldman Sachs International and RBS are arranging the transaction.

Severstal placed the $1.25 billion in 9.75%-notes on July 22, 2008. ABN Amro, Citi and BNP Paribas arranged the offering.