Frontier Oil's convertibles putable at 101% on merger with Holly

By Toni Weeks

San Diego, July 1 - Frontier Oil Corp.'s change of control, a consequence of becoming a wholly owned subsidiary of Holly Corp. on July 1, will allow holders of Frontier's $150 million of 6.875% senior notes due 2018 and its $200 million of 8.5% senior notes due 2016 to require the company to repurchase any or all of the notes, according to an 8-K filed with the Securities and Exchange Commission.

Also as a result of the change of control, each outstanding share of Frontier common stock can be converted into 0.4811 of a share of Holly common stock, with any fractional shares to be paid in cash.

At the noteholders' option, Frontier will repurchase the notes in integrals of $1,000 at a purchase price of 101% plus accrued interest. Frontier must mail a notice of its offer to repurchase the notes within 30 days following the merger.

Frontier became a subsidiary of Holly by merging with Holly's wholly owned subsidiary, North Acquisition Inc. The new company will be called HollyFrontier Corp. to reflect the merger.

Frontier is a Houston-based independent oil refiner and wholesaler of refined petroleum products. Holly is a Dallas-based petroleum refiner.

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