Metris to redeem $50 million of 10 1/8% notes

New York, Jan. 25 - Metris Cos. Inc. said it will prepay $50 million principal amount of its 10 1/8% senior notes due July 2006.

The redemption will be on Feb. 24, and Metris will pay a premium of 2.531%.

Following the redemption, Metris will have $100 million of the notes outstanding.

The Minnetonka, Minn., credit card issuer said that the prepayment is the third in the past three months, following a $50 million prepayment on Nov. 23 and a $25 million prepayment on its bank facility on Dec. 22.

Funding for the latest payment will come from the sale of $52.8 million of double-B rated asset-backed securities announced last week. The asset-backeds pay interest at Libor plus 325 basis points.

"The call of high-cost corporate debt will reduce our overall net interest costs and reduce our maturity concentration risk in 2006," said Metris controller Mark Wagener in a news release. "We will continue to look for ways to further lower our net interest expense and improve our capital structure during 2005."

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