Consumers Energy extends early deadline in exchange offer for 6.7%, 6.125% first-mortgage bonds

By Jennifer Chiou

New York, Nov. 21 – Consumers Energy Co. announced the extension of the early participation deadline in its private offer to exchange up to a total of $250 million of its $500 million of outstanding 6.7% first-mortgage bonds due 2019 and $350 million of outstanding 6.125% first-mortgage bonds due 2019 for newly issued first-mortgage bonds due 2025.

The early deadline is now 5 p.m. ET on Nov. 21, pushed back from Nov. 20.

The new price determination date is anticipated for Nov. 24.

As reported, the total exchange consideration for each series of old bonds will be based on a fixed spread over the yield to maturity of the bid-side price of the applicable reference U.S Treasury security.

For the 6.7% bonds, the reference Treasury security is the 1.75% bond due Sept. 30, 2019, and the fixed spread is 50 basis points. For the 6.125% bonds, the reference security and fixed spread are the 1.5% security due March 31, 2019 and 45 bps, respectively.

The coupon for the new bonds will be set at the same time as the total consideration and will be equal to the sum of (i) the yield of the 2.375% U.S. Treasury due Aug. 15, 2024 plus a pre-determined spread.

Bondholders who tender their bonds by the new early participation date will receive the total exchange consideration, which includes an early participation premium of $30.00 per $1,000 of notes. Those who tender after the early participation date will not receive the early premium.

The total exchange consideration and exchange consideration will be paid in a principal amount of new bonds equal to the total exchange consideration or exchange consideration, respectively.

The company will pay in cash accrued interest to, but not including, the settlement date, which is expected to be Dec. 11.

Tenders could be withdrawn at any time prior to 5 p.m. ET on Nov. 20.

The exchange offers will expire at midnight ET at the end of the day on Dec. 5. They began on Nov. 6.

The offers are contingent on the satisfaction of certain conditions, including the condition that the total principal amount of new bonds issuable upon exchange of the old bonds is at least $250 million.

The information agent is D.F. King & Co., Inc. (800 515-4479 or 212 269-5550 for banks and brokerage firms).

Consumers Energy is an electric and gas utility based in Jackson, Miss.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.