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PSEG unit gets early tenders of $194.8 million in offer for 7¾% notes
By Susanna Moon
Chicago, April 13 - PSEG Power LLC said investors tendered $194,796,000 of its 7¾% senior notes due 2011 as of 5 p.m. ET on April 12, the early participation date.
The company will pay cash and issue 5 1/8% senior notes due April 15, 2020 in exchange for up to $250 million of its $800 million of 7¾% notes.
The new notes are fully and unconditionally guaranteed by PSEG Power's three principal operating subsidiaries.
PSEG said it will pay $1,066.59 for each $1,000 principal amount, including a $30.00 premium for notes tendered by the early participation date.
The payout consists of $266.65 in cash and $801.04 principal amount of new notes, and was based on a yield of 0.819%. The payout for notes tendered after the early participation deadline will be $1,036.59, consisting of $259.15 in cash and $778.51 principal amount of new notes.
The exchange price was determined using the bid-side yield on the 0.875% Treasury note due March 31, 2011 plus a fixed spread of 35 basis points.
The offer will end at midnight ET on April 26. It began on March 29.
PSEG Power said that the exchange ratio will be the ratio determined by dividing the total exchange price by the new notes value, which will be based on a pricing formula using the bid-side yield on the 3.625% Treasury due Feb. 15, 2020 plus a fixed spread of 130 bps.
Separately, the company also plans to issue $250 million of the new notes on April 5. Interest will be payable semiannually.
PSEG Power added that it will not receive any cash proceeds from the exchange offer.
The company is a wholly owned subsidiary of Public Service Enterprise Group Inc., a Newark-based diversified energy company.
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