By Angela McDaniels
Seattle, Feb. 23 - El Paso Corp. began a tender offer for 21 series of notes on Friday, according to a company news release.
The company is offering to buy back any and all of its $272.102 million outstanding 7 5/8% senior notes due Aug. 16, 2007, $75.172 million outstanding 6¾% notes due Oct. 1, 2007, $300 million 6.95% notes due Dec. 15, 2007 and $215 million 7 5/8% senior notes due Sept. 1, 2008.
The tender consideration for these notes will be determined based on the bid-side yield of the reference U.S. Treasury securities at 2 p.m. ET on March 8 plus 50 basis points.
The reference U.S. Treasury securities are the 6 1/8% U.S. Treasury note due Aug. 15, 2007 for the 7 5/8% notes, the 4% U.S. Treasury note due Sept. 30, 2007 for the 6¾% notes, the 4¼% U.S. Treasury note due Nov. 30, 2007 for the 6.95% notes and the 4 7/8% U.S. Treasury note due Aug. 31, 2008 for the 7 5/8% notes.
El Paso is also offering to purchase up to a certain amount of 17 series of notes with maturities ranging from 2008 to 2037. The notes and their respective tender considerations are noted in the table below.
The tender offer will expire at midnight ET on March 22.
The tender considerations includes an early tender premium of $20 per $1,000 principal amount for noteholders who tender by 5 p.m. ET on March 8.
Noteholders will also receive accrued interest up to but excluding the settlement date.
El Paso said it may increase the maximum purchase amount for any or all of the series of notes, provided that the total principal amount of notes does not exceed $2.5 billion. If more than $2.5 billion notes are tendered, the company will accept the notes on a pro rata basis.
The company plans to have an initial settlement date of March 9 for the notes tendered in the any and all offer by the early tender date, followed by a final settlement date soon after the tender offer expiration.
El Paso said it will fund the tender offer with the proceeds from the sale of ANR Pipeline Co., El Paso's Michigan storage assets and El Paso's 50% interest in Great Lakes Gas Transmission to TransCanada Corporation and TC Pipelines, LP, which closed on Feb. 22.
Citigroup Corporate and Investment Banking (800 558-3745 or 212 723-6106), Goldman, Sachs & Co. (877 686-5059 or 212 357-0775) and Merrill Lynch, Pierce, Fenner & Smith Inc. (888 654-8637 or 212 449-4914) are the dealer managers for the tender offer, and Global Bondholder Services Corp. (866 952-2200 or 212 430-3774) is the information agent.
El Paso is a Houston-based provider of natural gas and related products.
El Paso tender offer
| Note | Amount outstanding | Maximum purchase amount | Tender consideration
|
| 6 | 5/8% notes due Feb. 1, 2008 | $100 million | $5 million | $1,007.50
|
| 6½% senior notes due June 1, 2008 | $200 million | $10 million | $1,010.00
|
| 6 | 3/8% senior notes due Feb. 1, 2009 | $200 million | $60 million | $1,016.25
|
| 6¾% senior notes due May 15, 2009 | $495 million | $165 million | $1,026.25
|
| 7¾% senior notes due June 15, 2010 | $400 million | $120 million | $1,068.75
|
| 10¾% senior notes due Oct. 1, 2010 | $56.573 million | $56.573 million | $1,167.50
|
| 7% senior notes due May 15, 2011 | $470 million | $100 million | $1,051.25
|
| 7 | 5/8% notes due July 15, 2011 | $595 million | $150 million | $1,075.00
|
| 9 | 5/8% senior notes due May 15, 2012 | $150 million | $40 million | $1,165.00
|
| 7 | 7/8% notes due June 15, 2012 | $465 million | $111.153 million | $1,090.00
|
| 7 | 3/8% notes due Dec. 15, 2012 | $300 million | $45 million | $1,068.75
|
| 7% notes Feb. 1, 2018 | $100 million | $10 million | $1,033.75
|
| 6.95% senior notes due June 1, 2028 | $200 million | $20 million | $1,021.25
|
| 8.05% notes due Oct. 15, 2030 | $300 million | $30 million | $1,128.75
|
| 7.8% notes due Aug. 1, 2031 | $700 million | $70 million | $1,100.00
|
| 7¾% notes due Jan. 15, 2032 | $1.249 billion | $125 million | $1,097.50
|
| 7.42% senior notes due Feb. 15, 2037 | $200 million | $20 million | $1,047.50
|
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