Airgas has announced that it has elected to redeem its 9.125 per cent Senior Subordinated Notes that are due 1 October 2011. The $225m notes will be redeemed in full on 27 October 2006, at a premium of 104.563 per cent.
A loss on the early extinguishment of debt of approximately $12m (about $8m after tax or $0.10 per diluted share) will be recognized related to the redemption premium and the write-off of unamortized debt issuance costs.
The loss will be reflected in the fiscal third quarter ending 31 December 2006. The redemption of the notes will be financed with borrowings under the company’s revolving credit facility.
Under existing covenant restrictions, liquidity will not be significantly affected by the redemption of the Notes. Based on current interest rates under the revolving credit facility, interest savings are estimated to be $500 thousand per month.
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