Severstal Columbus Closes $525m Senior Secured Note Offering

COLUMBUS, Miss., Feb. 19 /PRNewswire-FirstCall/ — Severstal Columbus LLC (“Severstal Columbus” or the “facility”), a subsidiary of OAO Severstal (LSE: SVST, RTS: CHMF), has issued a US$525 million aggregate principal amount of eight-year callable senior secured notes at an original issue discount of 2% and an annual coupon rate of 10.25%. The order book has closed two times oversubscribed.

Proceeds of the offering will be used to fully refinance all outstanding debt obligations originally incurred to finance Phase 1 construction at Severstal Columbus. In addition to a longer-term maturity rate, the newly issued debt carries less restrictive covenants that provide Severstal Columbus with greater flexibility to remain in compliance with the financial terms and requirements as agreed in the indenture during cyclical changes that may adversely affect steel industry fundamentals.

Alexei Kulichenko, CFO of OAO Severstal commented: “We are satisfied with the robust investor response to this issuance. We feel that this reflects expectations among fixed-income market participants that conditions in the North American steel industry are beginning to improve as well as their confidence that Severstal Columbus is well positioned to capitalize on the increase in consumer demand. The facility, one of the lowest cost producers of high quality steel in the US market with a focus on providing superior customer service, is currently operating well above average industry rates. The success of this placement despite the relatively high market volatility in the US and Europe is evidence that these attributes have been recognized by the market.”

Credit Suisse and Citi were joint book-running managers for the offering.

    For further information:

    Severstal
    Dmitry Druzhinin, Investor Relations
    Olga Antonova, Public Relations
    +7 495 926 7766

    Taylor Rafferty
    Michael Henson
    +1 212 889 4350

SOURCE Severstal Columbus LLC