United States Steel prices convertible notes
United States Steel Corporation has priced its public offerings of senior convertible notes and senior notes.
The company announced the pricing of its public offering of $275 million aggregate principal amount of 2.75 percent senior convertible notes due 2019. The company has granted the underwriters a 30 day option to purchase up to an additional $41.25 million aggregate principal amount of the convertable notes on the same terms and conditions to cover over-allotments, if any.
The convertable notes will pay interest semi-annually in arrears on April 1 and October 1 of each year beginning October 1, 2013 at a rate of 2.75 percent per year, and will mature on April 1, 2019, unless earlier redeemed, repurchased or converted. Upon conversion, the company will pay or deliver, as the case may be, cash, shares of the company’s common stock or a combination of cash and shares of the company’s common stock, at the company’s election. The conversion rate will initially be 39.5491 shares of common stock per $1,000 principal amount of convertable notes (representing an initial conversion price of approximately $25.29 per share of common stock and a conversion premium of approximately 30 percent based on the closing price of $19.45 per share of the company’s common stock on March 20, 2013), subject to adjustment in certain circumstances. The offerings are expected to close on March 26, 2013, subject to customary closing conditions.
The company also announced the pricing of its public offering of $275 million aggregate principal amount of 6.875 percent senior notes due 2021. The senior notes were priced at 100 percent of the principal amount. The senior notes will pay interest semi-annually in arrears on April 1 and October 1 of each year beginning October 1, 2013, and will mature on April 1, 2021, unless earlier redeemed or repurchased.
The company intends to use the net proceeds from the offerings for repurchases or repayment of indebtedness, focusing on near-term maturities, and any remaining proceeds for general corporate purposes.
J.P. Morgan Securities LLC, Barclays Capital Inc., Goldman, Sachs & Co., and Morgan Stanley & Co. LLC are the joint book-runners for these offerings.