New Issue: Southern Union advances deal, sells $100 million mandatory at 5.0%, up 25%

Nashville, Feb. 8 - Southern Union Co. sold $100 million of three-year mandatory convertible preferreds, which advanced to price a day early, at par of 50 with a 5.0% dividend and 25% initial conversion premium via joint bookrunners JPMorgan Securities and Merrill Lynch & Co.

The registered deal sold at the aggressive end of guidance for a 5.0% to 5.5% dividend and 20% to 25% initial conversion premium.

The Wilkes-Barre, Pa.-based natural gas pipeline operator said it would use proceeds to repay debt incurred in connection with its investment in CCE Holdings LLC. Southern Union also sold, on Monday, 14.9 million shares of common stock at $23 a share, for a total of $342.7 million, with those proceeds also earmarked to repay debt incurred in connection with its investment in CCE Holdings LLC.

Terms of the deal are:

Issuer:	Southern Union Co.
Issue:	Convertible mandatory preferreds
Bookrunners:	JPMorgan Securities and Merrill Lynch & Co.
Amount:	$100 million
Maturity:	February 2008
Dividend:	5.0%
Price:	Par, $50
Yield:	5.0%
Conversion premium:	25%
Conversion price:	$24.65/$30.76
Conversion ratio:	1.6254/2.0317
Contingent conversion:	No
Contingent payment:	No
Dividend protection:	Yes
Takeover protection:	Yes
Call:	Non-callable
Put:	No
Price talk:	5.0-5.5%, up 20-25%
Ratings:	S&P: BBB
Pricing date:	Feb. 8, advanced one day
Settlement date:	Feb. 11
Distribution:	Registered

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