By Paul A. Harris
St. Louis, Feb. 4 - Eight weeks after it priced $500 million of junk bonds yielding 15¼%, El Paso Corp. returned to the primary market to do another $500 million and decreased the yield by a whopping 612.5 basis points.
The Houston-based natural gas company priced its new issue of 8¼% seven-year senior unsecured notes (Ba3/BB-/) at 95.535 to yield 9 1/8% in a Wednesday drive-by deal led by left bookrunner Morgan Stanley & Co. Inc.
While the coupon came on top of the coupon talk, the yield came at the tight end of the 9¼% area yield talk.
Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. were joint bookrunners. Barclays Capital Inc., Credit Suisse, Fortis Investments, Scotia Capital, SG Corporate & Investment Banking, UBS Investment Bank, Unicredit and Harris Williams & Co. were the co-managers.
El Paso Corp.'s sale of the new 8¾% notes due February 2016 generated $477.675 million of proceeds, which will be used for general corporate purposes, including the repayment of debt maturing in 2009.
| Issuer: | El Paso Corp.
|
| Face amount: | $500 million
|
| Proceeds: | $477.675 million
|
| Maturity: | Feb. 15, 2016
|
| Security description: | Senior unsecured notes
|
| Left bookrunner: | Morgan Stanley & Co. Inc.
|
| Joint bookrunners: | Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc.
|
| Co-managers: | Barclays Capital Inc., Credit Suisse, Fortis Investments, Scotia Capital, SG Corporate & Investment Banking, UBS Investment Bank, Unicredit, Harris Williams & Co.
|
| Coupon: | 8¼%
|
| Price: | 95.535
|
| Yield: | 9 1/8%
|
| Spread: | 644 bps
|
| Call protection: | Non-callable, with make-whole provision at Treasuries plus 50 bps
|
| Trade date: | Feb. 4
|
| Settlement date: | Feb. 9
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB-
|
| Distribution: | SEC registered
|
| Price talk: | 8¼% coupon at a discount to yield 9¼% area
|
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