MarkWest accepts tenders for $165.64 million of 8¾% notes due 2018

By Jennifer Chiou

New York, March 10 - MarkWest Energy Partners, LP said it received and accepted tenders for $165,638,000 of 8¾% senior notes due 2018 in its offer for up to $170 million of the securities.

MarkWest began tender offers on Feb. 9 for any and all of its $275 million of 8½% senior notes due 2016 and its $500 million of 8¾% notes. Previously, the cap for the latter had been set at $125 million of notes.

At the consent expiration and early tender date of 5 p.m. ET on Feb. 23, the company had marked tenders and consents from holders of about 99% of its 8½% notes and tenders for $165.5 million of its 8¾% notes.

The offers ended at 11:59 p.m. ET on March 9.

The total payment for the 8¾% notes offer was determined using the modified Dutch auction procedure. The bid range was $1,090 to $1,115 per $1,000 principal amount, and the purchase price was $1,115. The total payment included an early tender payment of $30.00 for each $1,000 of notes for those tendering by Feb. 23.

Of the total tenders, holders of $130,000 of the 8¾% notes tendered after the early deadline.

Holders who tendered their 8¾% notes without specifying a bid price were deemed to have specified $1,090 per $1,000 of notes.

In connection with the tender offer for the 8½% notes, MarkWest solicited consents to certain proposed amendments that would eliminate substantially all of the restrictive covenants and some events of default in the indenture governing the notes.

Because the company received the needed majority in principal amount of the notes, it executed a supplemental indenture on the consent expiration date.

Holders who tendered their 8½% notes and delivered their consents by the consent expiration received the total payment of $1,072.50 for each $1,000 principal amount of notes, which included a $30.00 consent payment.

MarkWest also paid accrued interest to but excluding the payment date. The initial settlement date for holders tendering 8½% notes by the consent expiration was Feb. 24. The final settlement date for both offers is March 10.

As previously reported, both tender offers were subject to completion of a debt financing for proceeds - when taken together with cash on hand and borrowings available under MarkWest's revolving credit facility - sufficient to fund the offers. The offering of $300 million of 6½% notes closed on Feb. 24.

Barclays Capital Inc. (212 528-7581 or 800 438-3242) was the dealer manager for the offer. D.F. King & Co., Inc. (800 431-9643 or, for banks and brokers, 212 269-5550) was the depositary and information agent.

MarkWest is a Denver-based master limited partnership engaged in the gathering, transportation and processing of natural gas.

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