Alon Krotz Springs launches tender offer for $216.5 million 13½% notes

By Susanna Moon

Chicago, March 16 - Alon Refining Krotz Springs, Inc. said it began a cash tender offer and consent solicitation for its outstanding $216.5 million 13½% senior secured notes due 2014.

The company will pay a total purchase price of $1,080, including a $30 premium, for each $1,000 principal amount of notes tendered by the consent deadline at 5 p.m. ET on March 28.

Alon Krotz also will pay accrued interest.

The tender offer will end at midnight ET on April 11.

Holders who tender their notes after the consent date will receive only the base payment of $1,110 per $1,000 of notes.

The tender offer and consent solicitation are conditioned on the company securing proceeds from a new financing of up to $700 million and the company receiving consents from holders of at least a majority of the outstanding notes.

The financing could include borrowings by Alon USA Energy, Inc., an indirect parent company, the release noted.

The company is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants, affirmative covenants and events of default, and to allow the company to incur or guarantee debt in connection with the new financing, grant pari passu liens on the collateral securing the notes to the lenders providing the financing and otherwise dilute the rights of noteholders in relation to the collateral securing the notes, according to a company press release.

Holders who tender their notes will be deemed to have consented to the proposed amendments, and they may not deliver consents without tendering their notes.

By tendering the notes under the tender offer, holders would be waiving any defaults existing at the time the proposed amendments become operative, the release said.

Goldman, Sachs & Co. (800 828-3182 or collect at 212 357-4692) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (866 470-3800 or for banks and brokers 212 430-3774) is the information agent and depositary.

Alon Refining Krotz Springs is a refinery based in Krotz Springs, La. and is a subsidiary of Dallas-based Alon USA Energy, which refines and markets petroleum products.

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