El Paso talks $500 million five-year trust certificates at 7¾%-8%, pricing expected Wednesday

By Paul A. Harris

St. Louis, July 11 - El Paso Corp. talked its $500 million offering of five-year performance-linked trust certificates (B2) at 7¾% to 8% on Tuesday, according to a market sources.

The books close 12 p.m. ET Wednesday, and the certificates are expected to price thereafter.

Deutsche Bank Securities is the bookrunner.

The notes will be non-callable.

The company announced in a Monday news release that as part of its plan to refinance its credit facilities it intends to enter into a new $500 million five-year revolving credit facility with Deutsche Bank AG New York Branch as initial lender. The new facility is the first step in an anticipated restructuring and renewal of El Paso's credit facilities.

Deutsche Bank intends to hedge its exposure with respect to the new facility through a stand-by assignment agreement with the El Paso Performance-Linked Trust, which will issue the trust certificates in a private placement.

As a result of the stand-by assignment, the certificates to be issued by the trust will be linked to the credit of El Paso.

El Paso Corp. is a Houston-based provider of natural gas and related energy products.

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