By Paul A. Harris
St. Louis, Dec. 9 - El Paso Corp. priced a $500 million issue of 12% five-year senior notes (Ba3/BB-/) at 88.909 to yield 15¼% on Tuesday, according to informed source.
It was the first new corporate deal to price in the high-yield primary market since Oct. 30.
The yield came at the tight end of the price talk, which was for a 12% coupon at a discount to yield 15¼% to 15½%.
The quick-to-market issue, which was the subject of significant reverse inquiry, was three times oversubscribed, according to an informed source.
Morgan Stanley & Co. Inc. was left bookrunner for the registered notes sale. Citigroup, Goldman Sachs & Co. and J.P. Morgan Securities Inc. were joint bookrunners. The co-managers were BMO Capital Markets, Fortis Investments, Scotia Capital, Unicredit and Wells Fargo Capital.
Proceeds will be used for general corporate purposes, including the repayment of debt maturing during 2009.
El Paso is a Houston-based natural gas company.
| Issuer: | El Paso Corp.
|
| Amount: | $500 million
|
| Maturity: | Dec. 12, 2013
|
| Security description: | Senior unsecured notes
|
| Left bookrunner: | Morgan Stanley & Co. Inc.
|
| Joint bookrunners: | Citigroup, Goldman Sachs & Co., J.P. Morgan Securities Inc.
|
| Co-managers: | BMO Capital Markets, Fortis Investments, Scotia Capital, Unicredit, Wells Fargo Capital
|
| Coupon: | 12%
|
| Price: | 88.909
|
| Yield: | 15¼%
|
| Spread: | 1,362 bps
|
| Call protection: | Non-callable; make-whole provision at Treasuries plus 50 bps
|
| Trade date: | Dec. 9
|
| Settlement date: | Dec. 12
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB-
|
| Distribution: | SEC registered
|
| Price talk: | 12% coupon at a discount to yield 15¼ to 15½%
|
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