Vulcan Materials Co Thursday commented on the expected effects of its recently completed US$1.1bn bond issuance, the use of the net proceeds of the Issuance, including a tender offer for up to US$275m of its senior unsecured notes due 2012 and 2013.
On June 14, the company issued US$500m of senior unsecured notes due 2016 and US$600m of senior unsecured notes due 2021. Also, consistent with the previously communicated intended use of proceeds from the Issuance, the company purchased US$275m of senior unsecured notes in the Tender Offer.
The total cash used for the Tender Offer, including the purchase price above par value of the notes, accrued interest, and fees & expenses, was US$298.3m. The company said the net proceeds from the Issuance will be used to prepay the company’s US$450m term loan due 2015 and reduce the outstanding borrowings under its revolving credit facility.
Additionally, on June 14, the company entered into interest rate swaps with a consortium of banks to exchange the fixed rate on the US$500m notes due 2016 to floating rates. The company said it will incur a pretax charge of about US$26.5m in the second quarter ended June 30 in connection with the use of proceeds from the Issuance. Full year 2011 net interest expense is expected to be nearly US$213m.