U.S. Concrete to launch exchange offer for 9.5% convertible notes

By Marisa Wong

Madison, Wis., Dec. 27 - U.S. Concrete, Inc. entered into an exchange and consent agreement with two holders of its 9.5% convertible secured notes due 2015 on Dec. 20, according to an 8-K filing with the Securities and Exchange Commission. The two holders represent about 63% of the outstanding 9.5% convertible notes.

The company had announced earlier this month that it reached a non-binding agreement relating to a potential exchange offer with holders of a majority in principal amount of the notes. The company proposed to exchange all $55 million of its 9.5% convertible notes for $69.3 million of new 9.5% senior secured notes due Oct. 1, 2015.

According to the latest filing, the company has until Feb. 10 to begin the exchange offer and until April 10 to settle the offer.

As part of the exchange offer, holders tendering their notes will be required to give their consents to some proposed amendments. These amendments would eliminate substantially all of the negative covenants contained in the indenture relating to the 9.5% convertibles and would release all of the liens on the collateral securing the notes.

The offer will be conditioned upon holders tendering at least 82.5% of the outstanding principal amount of notes and holders representing 66 2/3% of the outstanding principal amount delivering consents. The company said the second condition should be satisfied if the minimum tender condition is satisfied.

Under the offer, each $1,000 principal amount of existing convertible notes would be exchanged for $1,260 principal amount of new senior notes, according to a term sheet released previously.

The new notes would be secured by the same collateral as the old notes and would have essentially the same terms as the old notes.

The company plans to make the senior notes callable at any time in whole or in part. The redemption price is to be par through Dec. 31, 2013, 102 from Jan. 1, 2014 through Dec. 31, 2014 and 103 from Jan. 1, 2014 through maturity.

U.S. Concrete is a Euless, Texas-based company that operates through two segments: ready-mixed concrete and concrete-related products as well as precast concrete products.

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