By Paul A. Harris
St. Louis, July 12 - El Paso Corp. priced a $500 million issue of five-year performance-linked trust certificates (confirmed B2/expected B+) at par to yield 7¾% on Wednesday, according to a market source.
The yield came at the tight end of the 7¾% to 8% price talk.
Deutsche Bank Securities was the bookrunner.
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.
As a result of the stand-by assignment, the certificates are linked to the credit of El Paso.
El Paso Corp. is a Houston-based provider of natural gas and related energy products.
| Issuer: | El Paso Corp.
|
| Amount: | $500 million
|
| Maturity: | July 15, 2011
|
| Security description: | Performance-linked trust certificates
|
| Bookrunner: | Deutsche Bank Securities
|
| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 267 bps
|
| Call protection: | Non-callable
|
| Trade date: | July 12
|
| Settlement date: | July 19
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+ (expected)
|
| Price talk: | 7¾%-8%%
|
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