Colorado Interstate to buy back $100 million of 5.95%, 6.8% notes

By Susanna Moon

Chicago, June 23 - Colorado Interstate Gas Co. said investors tendered $40.02 million of its 5.95% senior notes due March 15, 2015 and $201.77 million of 6.8% senior notes due Nov. 15, 2015.

The tender offer for up to $100 million total of its $75 million of 5.95% notes and $400 million of 6.8% notes expired at midnight ET on June 20.

Colorado Interstate Gas said that because the total amount of 6.8% notes tendered exceeded the amount of the tender cap, the amount that would be accepted for purchase was prorated. The proration factor was 29.7%.

For each $1,000 principal amount of notes tendered by 5 p.m. ET on June 6, the payout will be $1,001.38 for the 5.95% notes and $1,051.82 for the 6.8% notes. These amounts include an early tender premium of $30.00.

Notes tendered after the early tender deadline will receive the same amount less the early tender premium.

The company said it will also pay accrued interest up to but excluding the settlement date.

The payouts were calculated on June 6 using the 3 7/8% Treasury due May 15, 2018 and a fixed spread of 200 basis points.

As of the early tender deadline, holders had tendered $40.01 million of the 5.95% notes and $201.76 million of the 6.8% notes. The company expected to purchase all the 5.95% notes tendered by the early tender deadline on June 9.

The settlement date for all other notes was Monday.

Previously, Colorado Interstate Gas said that if it receives tenders in excess of the cap, it will accept all 5.95% notes before it accepts any 6.8% notes, and notes will be accepted on a pro rata basis.

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

Colorado Interstate Gas is a Delaware general partnership that transports, stores and processes natural gas. It is a subsidiary of El Paso Corp., which provides natural gas and related energy products and is based in Houston.

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