Southern California Edison in debt swap for $1 billion 8.95% '03 notes

Southern California Edison Co. said Tuesday (Jan. 14) that it had begun an offer to exchange a new series of first mortgage bonds for up to $1 billion of its existing 8.95% variable-rate notes which are scheduled to mature this coming November.

SCE, a Rosemead, Calif.-based regulated utility unit of Edison International that supplies electric power to central, coastal and southern California, said that the exchange offer will expire at 5 p.m. ET on Feb. 19. The company is offering $1,000 principal amount of its new 8% Series 2003A first and refunding mortgage bonds due 2007 per $1,000 principal amount of the existing notes.

In addition, holders who tender their 8.95% notes prior to the early tender deadline of 5 p.m. ET on Feb. 4, and who do not subsequently withdraw them will be entitled to an additional early participation payment of $10 cash per $1,000 principal amount of 8.95% notes tendered, assuming the exchange offer is consummated.

Tenders of the existing notes may be withdrawn at any time prior to the LATER of either A) 5 p.m. ET on Feb. 4, OR B) the time SCE announces that it has received valid and unwithdrawn tenders representing at least 25% of the outstanding principal amount of the 8.95%, but in no event later than the expiration date.

SCE said completion of the exchange offer is subject to a number of conditions, including the receipt by the company of valid and unwithdrawn tenders representing at least 25% of the outstanding principal amount of the 8.95% notes, as well as the absence of certain adverse legal and market developments.

It said that the offer offering of the new bonds in the exchange offer is being made only to holders of the existing notes who have verified to the company that they can be considered to be "qualified institutional buyers" or, persons other than a "U.S. person" located outside the United States, as such terms are defined in Rule 144A and Regulation S of the Securities Act of 1933, as amended. SCE plans to enter into a registration rights agreement under which it will agree to file an exchange offer registration statement with the Securities and Exchange Commission to allow eligible holders to exchange the new bonds for the same principal amount of a new series of substantially identical bonds that will be registered under the Securities Act.

SCE said the new bonds will be secured equally and ratably with all other first mortgage bonds outstanding now or in the future under its existing first mortgage bond indenture by a lien on substantially all of the company's properties and franchises.

Additionally, SoCal Edison may redeem the new bonds at any time, in whole or in part, at a "make whole" redemption price equal to the greater of A) the principal amount being redeemed OR the sum of the present values of the remaining scheduled payments of principal and interest on the new bonds being redeemed, discounted to the date fixed for redemption on a semi-annual basis at a 50-basis point fixed spread over a specified Treasury yield. In either case, the company will also pay to the redeeming holders accrued and unpaid interest up to the date of redemption.

Abraxas Petroleum extends exchange offer for 11½% '04 notes

Abraxas Petroleum Corp. said on Tuesday (Jan. 14) that it had extended its previously announced offer to exchange cash, stock and new debt for its existing Series A and Series D 11½% senior secured notes due 2004 to 12 midnight ET on Tuesday, subject to possible further extension, from its previous deadline at 12 midnight ET on Monday (Jan. 13).

As of the close of business on Monday, $151 million principal amount of the notes had been validly tendered or guaranteed - unchanged the amount which had been tendered or guaranteed by the prior deadline on Friday (Jan.10), and still well below the minimum tender threshold of 99% of the approximately $189 million of outstanding notes, which is a condition for the completion of the offer, among other conditions.

AS PREVIOUSLY ANNOUNCED: Abraxas, a San Antonio, Tex.-based independent oil and natural gas exploration and production company, said on Dec. 9 that it was beginning the exchange offer for its 11 ½% notes, which the company had jointly issued along with its wholly owned subsidiary, Canadian Abraxas Petroleum Limited.

Abraxas said that it would offer the holders of the existing notes a package consisting of $264 in cash, $610 principal amount of new 11½% Series A senior secured notes due 2007 (Abraxas subsequently corrected this to 11½% Series A secured notes due 2007 in a press release Thursday, Dec. 12), and approximately 31.36 shares of Abraxas common stock, per $1,000 principal amount of the existing notes tendered. .

Abraxas said that the interest on the new notes would be payable in cash unless prohibited; if cash interest payments are prohibited, interest would be paid in kind (i.e., paid the form of additional new notes) in principal amount equal to the amount of the accrued and unpaid interest on the new notes, plus an additional 1% per annum accrued interest for the applicable period.

Abraxas further said that the notes and shares of its common stock to be issued in the exchange offer have not been registered for unrestricted public trading under the Securities Act of 1933, as amended.

On Dec. 12, Abraxas, in addition to correcting the nomenclature of the new notes being offered as part of the exchange offer consideration, said that the offer would expire at 12 midnight ET on Tuesday (Jan. 7), which was subsequently extended several times when the minimum tender threshold was not achieved.

Pediatric Services of America buys back some 10% '08 notes

Pediatric Services of America, Inc. said on Tuesday (Jan. 14) that it has repurchased an additional $1 million of its 10% senior subordinated notes due 2008.

The notes were purchased in a private transaction for $950,000 cash, plus accrued interest. As a result, the company anticipates that this transaction will result in a pre-tax gain of approximately $31,000, net of the write-off of the related deferred financing fees, in the quarter which will end on March 31.

With the latest transaction, the aggregate principal amount of the notes now outstanding has been lowered to $23.35 million. Since Sept. 30, 2001, the company has repurchased $9 million of the notes.

AS PREVIOUSLY ANNOUNCED: Pediatric Services, a Norcross, Ga.-based provider of pediatric home health care services, said on Oct. 10, 2001 that it had repurchased an additional $5 million of its 10% notes (this following a previous private purchase of $700,000 of the notes, which had been announced on Aug. 15, 2001). The Oct. 10, 2001 transaction brought the remaining outstanding amount of the notes down to $27.35 million from $32.35 million previously. The company purchased the notes in a private transaction for $4,493,750 cash, plus accrued interest, and said that as a result, it expected to record a pre-tax extraordinary gain of approximately $387,000, net of the write-off of the related deferred financing fees, in the quarter that ended Dec. 31, 2001.

On June 7, 2002, the company said that it had repurchased an additional $3 million of the 10% notes due 2008. The repurchase was the latest in a series of repurchase transactions dating back to the previous summer, and lowered the amount of the notes remaining outstanding to $24.35 million from $27.35 million previously. In the latest buyback, the $3 million of notes were purchased in two private transactions for a total of $2.905 million cash, plus accrued interest. As a result, the company said it was anticipating that the repurchase would result in a pre-tax extraordinary gain of approximately $30,000, net of the write-off of the related deferred financing fees, in the quarter which ended on June 30.

Banco Santander-Chile sets pricing for 7% '07 notes offer

Banco Santander Chile said on Monday (Jan.13) that it had set the pricing terms for its previously announced offer to exchange new subordinated notes for any and all of its outstanding 7% subordinated notes due 2007.

The company said that if it accepts any tendered 7% notes, it will pay to tendering holders a total consideration package (per $1,000 principal amount of the existing notes tendered and not subsequently withdrawn) consisting of $1,000 principal amount of new 7 3/8% subordinated notes due 2012 plus a cash payment of $45.13.

Banco Santander said it calculated the annual interest rate on the new notes and the amount of the cash payment in accordance with the methodology set forth in the official exchange offer prospectus dated Dec. 13.

J.P, Morgan Securities is the lead dealer manager for the exchange offer, with Santander Central Hispano as co-dealer manager. D.F. King & Co. (bankers and brokers call collect at 212 269-5550, all others call toll-free at 800 949-2583) Is the information agent.

AS PREVIOUSLY ANNOUNCED: Banco Santander, a Santiago, Chile-based financial institution, said in a preliminary prospectus filed with the Securities and Exchange Commission on Nov. 4 that it would offer to exchange a combination of $300 million new subordinated notes due 2012, plus cash for all of the existing $300 million of 7% subordinated notes due 2007, which had been issued by its corporate predecessor, Banco Santiago.

Banco Santander did not announce a coupon for the planned new notes; instead, it said the price and interest-rate determination for the new notes, based on the relevant benchmark treasury yields, would take place at 4 p.m. ET two business days before the scheduled expiration of the exchange offer. The bank also did not initially announce an expiration date for its offer. It said that it expected to deliver the new notes to the holders of the existing notes who participate in the exchange offer on the third business day following the expiration date.

Banco Santander said it would offer $1,000 principal amount of the new notes plus an as-yet unspecified sum of cash per $1,000 principal amount of the old notes. It said it was undertaking the exchange offer extend the maturity of the old notes from 2007 to 2012, thus allowing it to extend the time that the subordinated debt represented by the old notes will qualify under Chilean banking regulations as part of the company's required regulatory capital.

The company said that the exchange offer would not be conditioned upon a minimum number of old notes being tendered.

On Jan. 7, Banco Santander said that it had extended the exchange offer from 12 noon ET on Tuesday (Jan. 14) to noon ET on Thursday (Jan. 16), subject to possible further extension. All other terms of the exchange offer as originally announced would remain in effect.

Santander said that the extension of the expiration deadline would change the date on which the interest rate and cash price for the notes would be set to, tentatively, Monday (Jan. 13), the third business day prior to the expiration time (at which time these were in fact determined) , and would also change the day the exchange offer will settle to Jan. 23 (the third business day following the expiration time).

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