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New Enterprise Stone & Lime Co., Inc. Announces Closing of Senior Notes Offering and the Early Settlement of its Previously Announced Cash Tender Offer to Purchase any and all of its 10.125% Senior Notes due 2022

New Enterprise Stone & Lime Co., Inc. (“NESL” or the “Company”), a leading privately held, vertically integrated construction materials supplier in Pennsylvania and western New York, announced today the closing of its previously announced offering of $200.0 million aggregate principal amount of its 9.750% Senior Notes due 2028 (the “New Notes”) in a private placement. The Company also announced the early settlement of its previously announced cash tender offer (the “Tender Offer”) to purchase any and all of its 10.125% Senior Notes due 2022 (the "2022 Notes").

The Company repurchased approximately $198,496,000 (or approximately 99.25%) of the outstanding 2022 Notes for a purchase price of $1,043.88 per $1,000 principal amount of 2022 Notes plus accrued and unpaid interest to, but not including, the early settlement date, July 15, 2020. Following the early settlement of the tender offer for the 2022 Notes, the Company issued an irrevocable notice of redemption for all remaining 2022 Notes and deposited with the trustee for the 2022 Notes an amount sufficient to satisfy and discharge the related indenture. The Company utilized the net proceeds of the offering of the New Notes, together with cash on hand and borrowings from its revolving credit facility, to fund the Tender Offer, the Consent Solicitation and the satisfaction and discharge of the Company’s obligations under the 2022 Notes and the related indenture (and the subsequent redemption of any 2022 Notes that remain outstanding after the initial settlement date of the Tender Offer) and to pay related fees and expenses.

Information relating to the Tender Offer and the Consent Solicitation are set forth in the table below:

 

CUSIP

Nos.

Outstanding

Principal

Amount

Title of

Security

Principal

Amount

Tendered by

Early Tender

Time

Tender Offer

Consideration(1)

Early

Tender

Premium(1)

Total

Consideration(2)

644274 AE2 (144A)
U64159 AC7 (Reg. S)

$200,000,000

10.125% Senior Notes due 2022

$198,496,000

$993.88

$50.00

$1,043.88

 

(1) Per $1,000 principal amount of the 2022 Notes validly tendered (and not validly withdrawn) and accepted for purchase in the Tender Offer.

(2) Includes the Early Tender Premium.

Holders of 2022 Notes validly tendered and not validly withdrawn on or prior to the Early Tender Time (as defined in the Offer to Purchase and Consent Solicitation Statement dated June 30, 2020 (the “Offer to Purchase”)) received the relevant Total Consideration (as defined in the Offer to Purchase), which includes an early tender premium of $50.00 per $1,000 principal amount of 2022 Notes validly tendered by such Holders and accepted for purchase by the Company. In addition to the applicable Total Consideration, all Holders of 2022 Notes accepted for purchase also received, in cash, all applicable accrued and unpaid interest rounded to the nearest cent, on such $1,000 principal amount of such 2022 Notes, from the last applicable interest payment date up to, but not including, the early settlement date, July 15, 2020.

As of the Early Tender Time, the Company received consents to the adoption of the proposed amendments to the indenture governing the 2022 Notes to eliminate most of the covenants and certain default provisions applicable to the 2022 Notes and shortening the notice period required before an optional redemption of the 2022 Notes from not less than 30 days’ prior notice to not less than 3 business days’ prior notice from Holders of approximately 99.25% of the outstanding principal amount of the 2022 Notes. The proposed amendments for the 2022 Notes became operative immediately after the tendered 2022 Notes were accepted for purchase.

The Tender Offer will expire at 11:59 p.m., New York City time, on July 28, 2020 (the “Expiration Date”), or any other date and time to which the Company extends the Tender Offer, unless earlier terminated. Tenders of the 2022 Notes in the Tender Offer may no longer be withdrawn, except in certain limited circumstances where additional withdrawal rights are required by law. Holders of the 2022 Notes validly tendered after the Early Tender Time and on or prior to the Expiration Date will be eligible to receive the relevant Tender Offer Consideration (as defined in the Offer to Purchase).

The New Notes were offered in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The New Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

About New Enterprise Stone & Lime Co., Inc.

New Enterprise Stone & Lime Co., Inc. is a leading privately held, vertically integrated construction materials supplier and heavy/highway construction contractor in Pennsylvania and western New York. Our core businesses include: construction materials (aggregate production (crushed stone, sand and gravel), hot mix asphalt production and ready mixed concrete production) and heavy/highway construction (heavy construction, hot mix asphalt paving and other site preparation services).

Forward-Looking Statements

Statements included herein may constitute forward looking statements. These statements are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in the Company’s reports. The Company undertakes no duty to update any forward looking statements made herein.

Contacts:

New Enterprise Stone & Lime Co., Inc.
At the Company:
Paul I. Detwiler, III
President and Chief Executive Officer
or
Investor Relations Contact:
Gregory FCA
Joe Hassett, SVP
610-228-2110
joeh@gregoryfca.com

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