Published on 6/13/2007 in the Prospect News High Yield Daily.
New Issue: El Paso prices $1.275 billion senior notes in two tranches
By Paul A. Harris
St. Louis, June 13 - El Paso Corp. priced $1.275 billion of senior notes (Ba3/BB-) in a quick-to-market two-part transaction on Wednesday, according to an informed source.
The Houston-based natural gas company priced a $375 million tranche of 6 7/8% seven-year notes at a 175 basis point spread to Treasuries, on top of price talk that was increased from 165 bps area. The seven-year notes were offered at an original issue discount of 99.646, resulting in a yield of 6.94%.
El Paso also priced a $900 million tranche of 7% 10-year notes at a 190 bps spread to Treasuries, again on top of price talk that was increased from the 185 bps area. The 10-year notes were offered at an original issue discount of 99.224 resulting in a yield of 7.11%.
Deutsche Bank Securities, Citigroup, Morgan Stanley and RBS Greenwich Capital were bookrunners for the notes, which have been registered with the Securities and Exchange Commission.
Proceeds will be used to redeem $1.2 billion of the company's 7¾% senior notes due 2013.
| Issuer: | El Paso Corp.
|
| Amount: | $1.275 billion
|
| Security description: | Senior notes
|
| Bookrunners: | Deutsche Bank Securities, Citigroup, Morgan Stanley, RBS Greenwich Capital
|
| Co-managers: | Banc of America Securities LLC, BNP Paribas, Fortis Securities, HVB Capital Markets, JP Morgan, Merrill Lynch & Co., Natexis Bleichroeder, SG Corporate & Investment Banking, Wachovia Securities
|
| Change-of-control put: | 101
|
| Trade date: | June 13
|
| Settlement date: | June 18
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB-
|
| Distribution: | SEC registered
|
|
|
| Seven-year notes
|
| Amount: | $375 million
|
| Maturity: | June 15, 2014
|
| Coupon: | 6 7/8%
|
| Spread: | 175 bps
|
| Original issue discount: | 99.646
|
| Yield: | 6.94%
|
| Price talk: | Treasuries plus 175 bps, increased from Treasuries plus 165 bps area
|
|
|
| 10-year notes
|
| Amount: | $900 million
|
| Maturity: | June 15, 2017
|
| Coupon: | 7%
|
| Spread: | 190 bps
|
| Original issue discount: | 99.224
|
| Yield: | 7.11%
|
| Price talk: | Treasuries plus 190 bps, increased from 185 bps area
|
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