Colorado Interstate Gas tenders for $125 million of notes

New York, Nov. 29 - Colorado Interstate Gas Co. said it has begun a cash tender offer for up to $125 million principal amount of its notes.

The offer is the first step in the company's plan to cut its debt by $225 million.

Any of the company's $200 million of 5.95% senior notes due 2015 that are tendered will be purchased first, followed by any of the $400 million of 6.8% senior notes due 2015 if the $125 million limit has not been reached.

For the 5.95% notes, Colorado Interstate Gas will pay an amount based on a 150 basis points spread over the reference security, the 4.25% U.S. Treasury due Nov. 15, 2017.

Pricing for the 6.8% notes will be based on a 155 bps spread over the same Treasury.

In both cases, the price calculated includes a $30.00 per $1,000 early tender premium that will only be paid to holders who tender by 5 p.m. ET on Dec. 12.

The tender ends at midnight ET on Dec. 27. Pricing will be set at 2 p.m. ET on Dec. 12.

Colorado Interstate Gas will also pay accrued interest up to but excluding the settlement date.

There is no minimum tender condition.

Merrill Lynch & Co. at (888 654-8637 or 212 449-4914) and JPMorgan (866 834-4666 or 212 834-4802) are dealer managers. Global Bondholder Services Corp. is depositary and information agent (866 952-2200 or 212 430-3774).

Colorado Interstate Gas is a subsidiary of Houston-based El Paso Corp. that transports stores and processes natural gas.

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