El Paso postpones attempt to remarket $272 million 6.14% notes

By Paul A. Harris

St. Louis, May 16 - El Paso Corp. postponed the remarketing of a $272 million issue of 6.14% senior unsecured notes due Aug. 16, 2007 (assumed ratings Caa1/CCC+), according to information from market sources and an 8-K filed with the Security and Exchange Commission on Monday.

Credit Suisse First Boston is the remarketing agent, according to market sources.

In the filing the company stated that it was unable to remarket the notes "at commercially reasonable rates."

The notes originally formed a part of El Paso's June 2002 issue of 9% equity security units, which include obligations to purchase the company's common stock on Aug. 16, 2005.

The Monday filing went on to state that the remarketing agent will have two more opportunities to remarket the notes prior to Aug. 16, 2005. If the remarketing agent remains unable to remarket the notes at commercially reasonable rates, then notes that have not been separated from the equity security units will ultimately be canceled in satisfaction of holders' stock purchase obligations.

If the remarketing is eventually successful, El Paso Corp. will not receive any of the proceeds, according to a market source.

El Paso Corp. is a Houston-based diversified oil and gas utility.

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