Century Aluminum talks $75 million seven-year convertible notes to yield 2.25% to 2.75%, up 20%-25%

By Abigail W. Adams

Portland, Me., April 6 – Century Aluminum Co. plans to price $75 million of seven-year convertible notes after the market close on Tuesday with price talk for a coupon of 2.25% to 2.75% and an initial conversion premium of 20% to 25%, according to a market source.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, BofA Securities Inc. and BNP Paribas Securities Corp. are bookrunners for the Rule 144A offering, which carries a greenshoe of $11.25 million.

The notes are non-callable for four years and then subject to a 130% hurdle.

They will be settled in cash, shares or a combination of both at the company’s option.

There is dividend and takeover protection.

In connection with the offering, the company will enter into capped call transactions.

Concurrently, the company is pricing a $250 million offering of seven-year senior secured notes in a Rule 144A and Regulation S offering.

Proceeds will be used to cover the cost of the call spread and, together with proceeds from the senior notes offering, to fund the tender offer of the $250 million outstanding of its 12% senior notes due 2025.

Century Aluminum is a Chicago-based aluminum producer.

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