Regency Energy starts exchange offer for Eagle Rock 8 3/8% notes

By Jennifer Chiou

New York, April 2 - Regency Energy Partners LP and Regency Energy Finance Corp. began a private exchange offer for any and all of the $550 million of outstanding 8 3/8% senior notes due 2019 of Eagle Rock Energy Partners, LP and Eagle Rock Energy Finance Corp., according to an 8-K filing with the Securities and Exchange Commission.

The company said that it is conducting the offer in connection with the acquisition of Eagle Rock's midstream business. The exchange offer is contingent on the completion of the acquisition.

Regency is offering new 8 3/8% senior notes due 2019 on a par-for-par basis plus accrued interest.

The company said the new Regency notes will have substantially the same economic terms as the Eagle Rock notes, including optional redemption terms.

At the request of Eagle Rock, Regency is soliciting consents to amend the note indenture to delete substantially all of the restrictive covenants, modify the covenants regarding mergers and consolidations and eliminate certain events of default.

The company needs consents from holders of a majority of the notes in order to make the amendments.

The offer will end at 11:59 p.m. ET on April 29.

Regency is a Dallas-based midstream energy partnership focused on natural gas and natural gas liquids. Eagle Rock is a midstream and upstream oil and natural gas company based in Houston.

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