Suburban again extends consent date, sweetens offer for Inergy notes

By Susanna Moon

Chicago, May 24 - Suburban Propane Partners, LP and Suburban Energy Finance Corp. again extended the consent solicitations for the $1.2 billion principal amount of 7% senior notes due 2018 and 6 7/8% senior notes due 2021 issued by Inergy, LP and Inergy Finance Corp. and bumped up the consent premium.

The company is now offering to pay $30 million total in cash to holders who deliver consents by the new deadline of 5 p.m. ET on May 31.

Assuming that consents are delivered for all $1.2 billion of the Inergy notes, the cash consent payment will be $25 per $1,000 principal amount. Assuming that consents are delivered for $1.0 billion of the notes, the premium will be $30 per $1,000 of notes, according to a press release by Suburban Propane.

Suburban previously offered to pay a cash consent fee of $3.75 per $1,000 principal amount of notes.

The consent deadline was extended from 5 p.m. ET on May 23 and, before that, May 18 and May 16. Holders may no longer withdraw tendered notes.

As of the previous consent date, holders had tendered about 32% of the outstanding Inergy notes.

Suburban said it may lower the minimum tender condition requiring tenders for at least $1.0 billion of notes.

Suburban is soliciting consents to amend the Inergy notes to delete all of the restrictive covenants, modify the covenants regarding mergers and consolidations and eliminate events of default. The amendments require the consent of a majority of holders of the outstanding principal amount of each series of Inergy notes.

Exchange offer

As previously noted, the companies are offering $1 billion principal amount of new 7% senior notes due 2018 and 6 7/8% senior notes due 2021 issued by Suburban Energy plus $200 million in exchange for tendered Inergy notes.

Each new series of notes will have substantially the same terms as the corresponding series of outstanding Inergy notes for which they are being offered in exchange, including coupon, interest payment dates, optional redemption terms and maturity.

The offers are in connection with, and conditioned upon, the acquisition of Inergy's retail propane operations.

The exchange offers began on May 3 and will run until 11:59 p.m. ET on May 31. They were announced on April 26.

Suburban Propane said on April 26 that it received a commitment to increase its revolving credit facility to $400 million from $250 million and that it planned on issuing $1 billion of 7% senior notes due 2018 and 6 7/8% senior notes due 2021.

Global Bondholder Services Corp. (866 387-1500 or collect 212 430-3774) is the information agent for the exchange offers.

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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