Consol Energy takes in early tenders for 38.9% 8% notes due 2017

By Toni Weeks

San Luis Obispo, Calif., April 15 - Consol Energy Inc. said it took in tenders for about $583 million, or 38.9%, of its outstanding $1.5 billion of 8% senior notes due 2017 by the consent expiration for the company's tender offer, 5 p.m. ET on April 15, according to a company news release.

Consol is also soliciting consents to proposed amendments that would eliminate substantially all restrictive covenants and some default provisions in the indenture governing the notes. Consents are needed from the holders of a majority of the notes in order to make the amendments.

As previously noted, the company has an early settlement option that will allow them to settle the notes tendered by the consent expiration as early as April 16, as long as the offer conditions have been satisfied. According to the press release, Consol intends to waive the condition requiring the execution of the supplemental indenture that would amend the indenture governing the notes so that it can settle the early-tendered notes on Wednesday.

Holders may no longer withdraw their notes, as the consent deadline has passed.

The company will pay $1,043.33 per $1,000 principal amount of notes. This includes a $20.00 consent payment for each note tendered by the consent expiration.

Holders will also receive accrued interest up to but excluding the payment date.

The offer will end at 11:59 p.m. ET on April 29, with final settlement expected April 30.

Consol said in the release that it intends to issue a notice of redemption for all of the notes not tendered in the offer prior to the withdrawal time.

Besides the execution of a supplemental indenture effecting the amendments, which has been waived, the offer is conditional on the consummation of one or more debt financings raising enough proceeds to fund the offer. The company priced $1.6 billion of eight-year notes at par to yield 5 7/8% on April 10.

The dealer managers are J.P. Morgan Securities LLC (212 834-4802 or 866 834-4666) and Credit Suisse Securities (USA) LLC (212 325-2476 or 800 820-1653). The tender agent and information agent is D.F. King & Co., Inc. (800 967-4612 or cnx@dfking.com).

Consol Energy is a Pittsburgh-based producer of natural gas and coal.

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