Suburban Propane begins tender offer for 7 3/8 % senior notes

By Marisa Wong

Madison, Wis., Feb. 10 – Suburban Propane Partners, LP and wholly owned subsidiary Suburban Energy Finance Corp. have begun a cash tender offer for any and all of their $250 million of 7 3/8 % senior notes due 2020, according to a press release.

The companies are also soliciting consents to proposed amendments to the indenture governing the notes. The proposed changes would eliminate some covenants and events of default under the notes, shorten the minimum notice period for redemption of the notes to three business days and amend other provisions.

The offer will expire at 11:59 p.m. ET on March 10.

Holders who tender their notes and deliver their consents prior to 5 p.m. ET on Feb. 24, the consent payment deadline, will be entitled to receive the total consideration of $1,041.68 for each $1,000 principal amount of notes accepted for payment. The total consideration includes a consent payment of $30.00 per $1,000 of notes.

Holders who tender their notes after the consent payment deadline but on or prior to the expiration date will receive $1,011.68 for each $1,000 of notes accepted for purchase, which is the total consideration less the consent payment.

The issuers will also pay accrued interest up to, but not including, the applicable settlement date. The companies have the option to settle the tender offer early, so that holders whose notes are tendered prior to the consent payment deadline and accepted for purchase could receive payment as early as Feb. 25. Settlement for notes not settled at the initial settlement date is expected to be March 11.

Following receipt of consents of a majority in principal amount of the outstanding notes, Suburban Propane will execute a supplemental indenture effecting the proposed amendments. Tenders and consents may not be withdrawn on or following the date the supplemental indenture is completed.

Closing of the offer will be subject to a number of conditions, including receipt of the required consents to amend the notes indenture and completion of a new senior debt offering.

Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760) is the dealer manager. D.F. King & Co., Inc. (866 745-0273, 212 269-5550 or sph@dfking.com) is the information agent.

Based in Whippany, N.J., Suburban Propane supplies propane, fuel oil and related products and services and markets natural gas and electricity.

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