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Aquila tenders for up to $150 million notes
By Jennifer Chiou
New York, May 12 - Aquila, Inc. announced the start of a cash tender offer for up to $150 million of its senior notes as part of a debt reduction plan.
Affected notes include Aquila's $85.9 million of 6.7% senior notes due Oct. 15, $36.905 million of 8.2% senior notes due Jan. 15, 2007, $199 million of 7 5/8% senior notes due Nov. 15, 2009, $250 million 9.95% senior notes due Feb. 1, 2011 and $197 million of 7¾% senior notes due June 15, 2011.
The offer ends at midnight ET on June 9.
For each $1,000 principal amount of notes of the 6.7% notes, the company said it will base its payout on the yield to maturity of the 6½% Treasury due Oct. 15 and 50 basis points while for the 8.2% notes the formula is the 3 1/8% Treasury due Jan. 31, 2007 and 50 bps.
Pricing will be determined at 2 p.m. ET on May 25.
For each $1,000 principal amount of the other series of notes, Aquila said it will pay $1,046.25 for the 7 5/8% notes, $1,135 for the 9.95% notes and $1,060 for the 7¾% notes.
The payouts include a $20.00 early tender premium for those who tender by the early deadline at 5 p.m. ET on May 25.
Aquila added it may increase the maximum tender amount for the notes.
"This transaction efficiently uses the proceeds raised from recent asset sales to reduce our debt and interest expense and further enhance the company's credit profile," chief financial officer Rick Dobson said in a news release.
Citigroup Corporate and Investment Banking is the dealer manager (800 558-3745 or call collect 212 723-6106). Global Bondholder Services Corp. is the information agent and depository (866 294-2200).
Based in Kansas City, Mo., Aquila operates electric power generation and electric and natural gas transmission and distribution utilities.
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