Inergy lowers tender offer cap for 6 7/8%, 7% notes to $150 million

By Angela McDaniels

Tacoma, Wash., Dec. 19 - Inergy LP decreased the maximum amount of notes it will buy in the tender offer for its $750 million of 6 7/8% senior notes due 2021 and $600 million of 7% senior notes due 2018 to $150 million from $300 million, according to a company news release.

The company made the change due in part to the proceeds from Inergy Midstream, LP's initial public offering of common units being less than originally expected. The smaller cap will result in a smaller amount of debt outstanding under the company's revolving credit facility.

In addition, the early tender date and the withdrawal deadline were extended to 5 p.m. ET on Dec. 28 from 5 p.m. ET on Dec. 20.

The acceptance priority level is one for the 6 7/8% notes and two for the 7% notes.

For each $1,000 principal amount, Inergy will pay $1,025 for the 6 7/8% notes and $1,040 for the 7% notes. These prices include an early tender premium of $30 for those who tender by the early tender deadline.

Holders will also receive accrued interest up to the settlement date.

If the offer is oversubscribed at the early tender date, Inergy may opt not to accept any additional notes tendered after the early tender date.

Tender offer for 8¾% notes

The company did not change the terms of the tender offer for any and all of its $95,041,000 of 8¾% senior notes due 2015.

Inergy is also soliciting consents to amend the 8¾% note indenture to eliminate most of the covenants and some default provisions. Holders who tender must deliver consents and vice versa.

The payment on offer for the 8¾% notes is $1,140 per $1,000 principal amount. This includes a consent payment of $30 for holders who tender with consents by the consent deadline, 5 p.m. ET on Dec. 20.

Inergy will also pay accrued interest up to the settlement date.

Both tender offers expire at 11:59 p.m. ET on Jan. 5.

The offer for the 8¾% notes is subject to consents being received for a majority of the notes.

Barclays Capital Inc. (800 438-3242 or 212 528-7581), Morgan Stanley & Co. LLC (800 624-1808) and SunTrust Robinson Humphrey, Inc. (404 926-5051) are the joint dealer managers, and D.F. King & Co., Inc. (800 290-6426, banks and brokers call 212 269-5550) is the depositary and the information agent.

Inergy is a Kansas City, Mo., master limited partnership with operations that include the retail marketing, sale and distribution of propane. It also operates a natural gas storage business, a liquid petroleum gas storage business, a solution-mining and salt production company and a propane supply logistics, transportation and wholesale marketing business.

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