Following the successful placement of its convertible and non-convertible bonds,  steel giant ArcelorMittal has announced the full exercise of the greenshoe option, increasing the size of the offering to 1.25 billion euro, corresponding to 61,728,395 bonds with a principal amount of 20.25 euro per bond.

''ArcelorMittal is pleased to announce the successful placement of its Euro 1.1 billion bonds convertible and/or exchangeable into new and/or existing shares due April 1, 2014, announced earlier today,'' the group said in a website release.

"To receive such a positive response to the issue in the current economic climate is particularly pleasing, and we believe represents a strong indication of confidence in ArcelorMittal. The convertible bond brings multiple benefits to the company, enabling us to extend the maturity of our debt and diversify our debt structure, as well as further enhancing our liquidity," said Aditya Mittal, CFO of ArcelorMittal.

The principal amount of the bond issue, which has been raised from 750 million euro to 1.1 billion euro, will now go up further to a maximum of 1.25 billion euro if the over-allotment option is exercised in full by 30 March 2009.

The nominal value of each bond corresponds to Euro 20.25, providing a premium of 32 per cent above the reference price of ArcelorMittal shares on Euronext Amsterdam. The conversion / exchange ratio of the bonds will be one new or existing ArcelorMittal share per bond, subject to customary adjustment provisions.

The bonds will bear interest at 7.25 per cent payable semi-annually and will be redeemed at par on 1 April 2014. The bonds may be redeemed at the option of the issuer at any time on or after 19 April 2013 subject to certain conditions.

The bonds were offered by way of a private placement to qualified investors within the European Union, it said, adding, the bonds were not offered or sold in the United States, Australia, Canada and Japan.

Settlement and delivery of the bonds is scheduled to take place on 1 April 2009, the release said.
 
This offering is lead-managed by Calyon and Société Générale Corporate & Investment Banking acting as joint lead-managers and joint bookrunners, with Natixis and Rabobank as co-lead managers.

ArcelorMittal is the world's leading steel company
ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks.

With an industrial presence in over 20 countries spanning four continents and operations in more than 60 countries, the company covers all of the key steel markets, from emerging to mature.

In 2008, ArcelorMittal had revenues of $124.9 billion and crude steel production of 103.3 million tonnes, representing approximately 10 per cent of world steel output.

ArcelorMittal is listed on the stock exchanges of Paris, Amsterdam, New York, Brussels, Luxembourg and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia.