Allegheny Technologies Announces Proposed Notes Offerings
05/27/2009 - Allegheny Technologies announces plans to offer $650 million of new debt with proceeds going toward the purchase of outstanding 8.375% Notes due 2011 as well as contributions to the company’s pension plan.
Allegheny Technologies Inc. announced plans to offer $650 million of new debt—$300 million of senior notes due 2019 and $350 million of convertible notes due 2014—with proceeds going toward the purchase of outstanding 8.375% Notes due 2011 as well as contributions to the company’s pension plan.
The offerings are to be made pursuant to the shelf registration statement just filed with the SEC, but neither offering is to be contingent on completion of the other. The interest rate, conversion rate, and other financial terms of the notes will be based on pricing. The company said that it expects to grant the underwriters for the convertible offering an option to purchase up to $52.5 million in additional notes to cover over-allotments.
ATI said it intends to use net proceeds from the senior notes offering to purchase its outstanding 8.375% Notes due 2011. As of Tuesday (5/26/09), there were $300.0 million in aggregate principal amount of ATI’s 8.375% Notes due 2011 outstanding.
ATI intends to use net proceeds from the convertible notes offering to manage liabilities and other obligations, including voluntary contributions to its defined benefit pension trust and contributions to trusts established to fund retiree medical benefits.
Citi and JPMorgan are the joint book-running managers for the senior notes offering, and JPMorgan and Citi are the joint book-running managers for the convertible note offering.
Allegheny Technologies is one of the largest and most diversified specialty metals producers in the world with revenues of $5.3 billion during 2008. ATI’s major markets are aerospace and defense, chemical process industry/oil and gas, electrical energy, medical, automotive, food equipment and appliance, machine and cutting tools, and construction and mining. Its products include titanium and titanium alloys, nickel-based alloys and superalloys, grain-oriented electrical steel, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, and forgings and castings.
