By Jennifer Chiou
New York, March 9 - El Paso Corp. announced pricing for four series of notes and increased the maximum purchase amount for some series in its tender offer for 21 series of notes.
The company received tenders from holders of $229.02 million of its $272.102 million of 7 5/8% senior notes due Aug. 16, 2007, $49.215 million of its $75.172 million outstanding 6¾% notes due Oct. 1, 2007, $203.752 million of its $300 million of 6.95% notes due Dec. 15, 2007 and $145.102 million of its $215 million of 7 5/8% senior notes due Sept. 1, 2008 by the early deadline.
For each $1,000 principal amount of notes, the company said it will pay $1,009.01 for the 7 5/8% notes due 2007, $1,006.62 for the 6¾% notes, $1,011.01 for the 6.95% notes and $1,033.78 for the 7 5/8% notes due 2008. The payouts include a $20.00 payment for those who tendered by the early deadline at 5 p.m. ET on March 8.
The tender consideration for these notes was 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 were 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 company increased the maximum purchase amounts for 14 series of notes based on tenders received by 5 p.m. ET on March 8. The notes and their new respective total tender considerations are noted in the table below.
The maximum repurchase amounts have not changed for three series of notes. The company received tenders from holders of $81.124 million of its 6¾% notes due 2009, $23.634 million of its 10¾% notes due 2010 and $12.308 million of 8.05% notes.
The tender offer will expire at midnight ET on March 22. It began on Feb. 23.
The tender considerations include an early tender premium of $20.00 per $1,000 principal amount for noteholders who tendered by the early deadline.
Noteholders will also receive accrued interest up to but excluding the settlement date.
El Paso said it may again 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 said it 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 | Outstanding | Maximum purchase amount | Consideration
|
| 6 | 5/8% notes due Feb. 1, 2008 | $100 million | $47.848 million | $1,007.50
|
| 6½% notes due June 1, 2008 | $200 million | $61.842 million | $1,010.00
|
| 6 | 3/8% notes due Feb. 1, 2009 | $200 million | $88.266 million | $1,016.25
|
| 6¾% notes due May 15, 2009 | $495 million | $165 million | $1,026.25
|
| 7¾% notes due June 15, 2010 | $400 million | $251.048 million | $1,068.75
|
| 10¾% notes due Oct. 1, 2010 | $56.573 million | $56.573 million | $1,167.50
|
| 7% notes due May 15, 2011 | $470 million | $272.924 million | $1,051.25
|
| 7 | 5/8% notes due July 15, 2011 | $595 million | $235.815 million | $1,075.00
|
| 9 | 5/8% notes due May 15, 2012 | $150 million | $93.796 million | $1,165.00
|
| 7 | 7/8% notes due June 15, 2012 | $465 million | $216.156 million | $1,090.00
|
| 7 | 3/8% notes due Dec. 15, 2012 | $300 million | $147.112 million | $1,068.75
|
| 7% notes Feb. 1, 2018 | $100 million | $17.751 million | $1,033.75
|
| 6.95% notes due June 1, 2028 | $200 million | $25.48 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 | $118.716 million | $1,100.00
|
| 7¾% notes due Jan. 15, 2032 | $1.249 billion | $213.898 million | $1,097.50
|
| 7.42% notes due Feb. 15, 2037 | $200 million | $39.521 million | $1,047.50
|
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