Terra Industries Inc. Announces Closing of Private Offering of Convertible Preferred Shares SIOUX CITY, Iowa, Oct. 15 /PRNewswire-FirstCall/ -- Terra Industries Inc. (NYSE symbol: TRA) announced the closing of its private offering of $100 million of Series A cumulative convertible perpetual preferred shares. An additional $20 million of the Series A preferred shares could be issued pursuant to a 30-day option available to the initial purchasers. The preferred shares will pay dividends, in cash or common shares at the Company's option, at a rate of 4.25% per annum. The preferred shares are convertible into the Company's common shares at a conversion rate of 100.4016 common shares per preferred share, which is equivalent to an initial conversion price of $9.96 per common share, subject to adjustment. The Company may also exchange the preferred shares for convertible subordinated debentures. The Company intends to use the net proceeds of this offering to redeem up to 35% of its existing 111/2% Second Priority Senior Secured Notes due 2010 and for general corporate purposes. The preferred shares have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act. Terra Industries Inc., with 2003 revenues of $1.4 billion, is a leading international producer of nitrogen products. The statements above regarding the Company's intent with respect to the use of proceeds of the offering are forward-looking statements. Actual results may differ materially from those reflected in these forward-looking statements for a number of reasons, including general economic and political conditions and changes in the financial markets. Note: Terra Industries' news announcements are also available on its web site, http://www.terraindustries.com/. DATASOURCE: Terra Industries Inc. CONTACT: Mark Rosenbury of Terra Industries, +1-712-279-8756 Web site: http://www.terraindustries.com/ Company News On-Call: http://www.prnewswire.com/comp/437906.html

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