New Issue: El Paso Natural Gas $355 million seven-year notes yield 7 7/8%

By Paul A. Harris

St. Louis, July 16 - El Paso Natural Gas Co. sold $355 million of 7 5/8% senior notes due Aug. 1, 2010 (B1/B+) at 98.667 on Wednesday to yield 7 7/8%, according to syndicate sources.

Price talk was for a yield of 7¼%-7½%. The deal was increased from $350 million.

Citigroup and Credit Suisse First Boston were joint bookrunners on the Rule 144A deal. The co-managers were Banc of America Securities, SG Cowen and Bank of Tokyo Mitsubishi.

Proceeds will be used to fund the Western power settlement.

Issuer:	El Paso Natural Gas Co.
Amount:	$355 million (increased from $350 million)
Maturity:	Aug. 1, 2010
Security description:	Senior notes
Bookrunners:	Citigroup, Credit Suisse First Boston
Co-managers:	Banc of America Securities, SG Cowen, Bank of Tokyo Mitsubishi
Coupon:	7 5/8%
Price:	98.667
Yield:	7 7/8%
Spread:	443 basis points
Call features:	Make-whole call at T+75 basis points until Aug. 1, 2007, then callable at 103.813, 101.906, declining to par on Aug. 1, 2009 and thereafter
Settlement date:	July 21, 2003
Ratings:	Moody's: B1
	Standard & Poor's: B+
Rule 144A Cusip:	283695BL7
Price talk:	7¼%-7½%

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