Consol lifts tender cap in oversubscribed offer for 8¼% notes

By Marisa Wong

Madison, Wis., Aug. 12 – Consol Energy Inc. said it increased the tender cap for its previously announced Dutch auction cash tender offer to purchase up to $200 million of its 8¼% senior notes due 2020. The company is now offering to purchase up to $235.2 million principal amount of its $1.25 billion outstanding 8¼% notes, according to a press release.

The tender offer began on July 29 and will expire at 11:59 p.m. ET on Aug. 25.

As of 5 p.m. ET on Aug. 11, the early tender time, holders had tendered $943,559,000 of the 8¼% notes.

Consol said it has decided to exercise its early settlement right for all of the notes tendered by the early tender time. The company accepted a total of $235.2 million of the notes for payment, with settlement expected to occur on Tuesday.

Because the total amount of notes tendered exceeds the tender cap, the company will first accept the $206,468,000 principal amount of notes with a bid price less than the clearing price and then accept the $28,732,000 principal amount notes tendered with a bid price equal to the clearing price.

Holders whose notes have been accepted for purchase will receive the total consideration of $1,075 per $1,000 principal amount, along with accrued interest to but excluding the payment date. The total consideration includes an early tender premium of $30 per $1,000 of notes.

As previously noted, the total consideration is equal to the clearing price, which was determined under a modified Dutch auction until the early tender time. This means that holders who elected to participate in the tender offer prior to the early tender time had to specify the minimum total consideration they would be willing to receive in exchange for each $1,000 of notes tendered.

The bid price had to be expressed in increments of $0.50 and could not be not less than $1,070.00 or more than $1,087.50.

The withdrawal deadline for the offer was 5 p.m. ET on Aug. 11 and has not been extended. The offer still expires on Aug. 25, but unless the company increases the tender cap prior to the expiration time, no notes tendered after the early deadline will be accepted for purchase.

All notes tendered at prices above the clearing price will be returned to holders after the expiration time.

As previously announced, the tender offer is not conditioned upon any minimum number of notes being tendered, but it is subject to a number of other conditions, including the completion of a debt offering in a principal amount of at least $200 million.

Goldman Sachs & Co. (800 828-3182) is the dealer manager for the tender offer. D.F. King & Co., Inc., (800 848-3416 or cnx@dfking.com) is the tender agent and information agent.

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

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