New Issue: Hanover Compressor sells $200 million seven-year notes to yield 8 5/8%

By Paul A. Harris

St. Louis, Dec. 9 - Hanover Compressor Co. sold $200 million of senior notes due Dec. 15, 2010 (B3/B) at par Tuesday to yield 8 5/8%, according to syndicate sources.

Price talk was for a yield in the 8¾% area.

JP Morgan and Citigroup ran the books on the registered deal. The co-managers were Banc One Capital Markets, Credit Lyonnais Securities, Royal Bank of Scotland, Scotia Capital, Wachovia Securities, Wells Fargo Securities and ABN Amro.

Hanover Compressor will use proceeds along with available cash to repay its 1999A equipment lease notes due June 2004.

The issuer is a Houston-based natural gas compression and treating services company.

Issuer:	Hanover Compressor Co.
Amount:	$200 million
Maturity:	Dec. 15, 2010
Security description:	Senior notes
Bookrunners:	JP Morgan, Citigroup
Co-managers:	Banc One Capital Markets, Credit Lyonnais Securities, Royal Bank of Scotland, Scotia Capital, Wachovia Securities, Wells Fargo Securities, ABN AMRO
Coupon:	8 5/8%
Price:	Par
Yield:	8 5/8%
Spread:	471 basis points
Call features:	Make-whole call until Dec. 15, 2007, then at 104.313, 102.158, par on Dec. 15, 2009 and thereafter
Equity clawback:	Until Dec. 15, 2006 for 35% at 108.625
Settlement date:	Dec. 15
Ratings:	Moody's: B3
	Standard & Poor's: B
Price talk:	8¾% area

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