New Issue: American Real Estate upsized $353 million eight-year notes yield 8¼%

By Paul A. Harris

St. Louis, May 6 - American Real Estate Partners LP priced an upsized $353 million of eight-year senior notes (Ba2/BB) Thursday at 99.266 with an 8 1/8% coupon to yield 8¼%.

Price talk was 7¾% to 8%.

Bear Stearns & Co. ran the books on the Rule 144A issue.

Proceeds will be used for general business purposes including investments and acquisitions.

The issuer is a Mount Kisco, N.Y.-based investor in rental real estate, hotels and resorts, housing and condominium development.

Issuer:	American Real Estate Partners LP
Amount:	$353 million, increased from $300 million
Maturity:	June 1, 2012
Security description:	Senior notes
Bookrunner:	Bear Stearns & Co.
Coupon:	8 1/8%
Price:	99.266
Yield:	8¼%
Spread:	381 basis points
Call features:	Callable after June 1, 2008 at 104.063, 102.031, par on or after June 1, 2010
Equity clawback:	Until June 1, 2007 for 35% at 108.125
Ratings:	Moody's: Ba2
	Standard & Poor's: BB
Price talk:	7¾%-8%

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