New Issue: Hiland Partners upsizes to $400 million, prices eight-year notes at par to yield 7¼%

By Paul A. Harris

Portland, Ore., Sept. 11 - Hiland Partners, LP and Hiland Partners Finance Corp. priced an upsized $400 million issue of eight-year senior notes (B3/B-/) at par to yield 7¼% on Tuesday, according to a syndicate source.

The yield printed 12.5 basis points beneath the low end of yield talk that was set in the 7½% area.

Bank of America Merrill Lynch, Wells Fargo Securities LLC and RBS Securities Inc. were the joint bookrunners for the issue, which was upsized from $350 million.

Proceeds, along with equity contributions, will be used to pay down the company's revolving credit facility.

Hiland is an Enid, Okla.-based provider of natural gas gathering and processing services.

Issuer:	Hiland Partners, LP and Hiland Partners Finance Corp.
Amount:	$400 million, increased from $350 million
Maturity:	Oct. 1, 2020
Securities:	Senior notes
Bookrunners:	Bank of America Merrill Lynch, Wells Fargo Securities LLC, RBS Securities Inc.
Senior co-managers:	J.P. Morgan Securities LLC, US Bancorp
Co-managers:	Bank One Southcoast, Comerica Securities
Coupon:	7¼%
Price:	Par
Yield:	7¼%
Spread:	596 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Oct. 1, 2016, then callable at 103.625, 101.813, par on and after Oct. 1, 2018
Equity clawback:	35% at 107.25 until Oct. 1, 2015
Change-of-control put:	101%
Trade date:	Sept. 11
Settlement date:	Sept. 18
Ratings:	Moody's: B3
	Standard & Poor's: B-
Distribution:	Rule 144A with registration rights and Regulation S
Price talk:	7½% area
Marketing:	Roadshow

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