TECO Energy gets tenders for $297.2 million 7½% notes, completes exchange offers

By Jennifer Chiou

New York, Dec. 21 - TECO Energy, Inc. said it accepted tenders from holders of $297.2 million of its $300 million of 7½% notes due 2010.

The tender offer expired at 5 p.m. ET on Dec. 19.

In addition, the company wrapped the exchange offers for its 7.2% notes due 2011, 7% notes due 2012 and 6¾% notes due 2015. The early deadline and final deadline in the par-for-par exchange offers were to be midnight ET on Dec. 19, with the early deadline prolonged from 5 p.m. ET on Dec. 5. The offers began on Nov. 20.

The payout for the 7½% notes was $1,088.23 per $1,000 principal amount and was determined at 2 p.m. ET on Dec. 6, based on the bid-side yield to maturity of the 3 5/8% U.S. Treasury note due June 15, 2010 plus 85 basis points.

The tender consideration included an early tender premium of $20.00 for each $1,000 principal amount of notes tendered by the early participation deadline, which was 5 p.m. ET on Dec. 5. Holders of $294.2 million of the 7½% notes had tendered by the early deadline.

Noteholders also received accrued interest up to but excluding the settlement date, which was Dec. 7 for notes tendered by the early participation deadline and Dec. 21 for notes tendered after that.

The tender offer was conditioned on the completion of the sale of TECO Transport Corp. TECO Energy previously said it planned to fund the tender offer with a portion of the proceeds from the sale.

Upon settlement, TECO Finance issued $300 million of 6.572% notes due 2017.

Exchange offers

TECO Energy announced the results in its offer to exchange its 7.2% notes and 7% notes for up to $300 million of new notes with coupons corresponding to the old notes issued by TECO Finance Inc. The new notes mature on Nov. 1, 2017.

At the final deadline, the company said it accepted tenders to exchange $236.4 million of 7.2% notes and $63.6 million of 7% notes.

At 5 p.m. ET on Dec. 6, TECO Energy said it had obtained tenders to exchange $236.3 million of 7.2% notes and $155.1 million of 7% notes.

The company planned to accept all tenders for the 7.2% notes before it accepted any tenders for the 7% notes.

To consummate the offer, TECO Energy said it had to receive enough tenders to result in the issuance of at least $200 million of new notes.

The company also announced results of its par-for-par exchange offers for its 7.2% notes, 7% notes and 6¾% notes. Noteholders received a like amount of new notes with identical terms issued by TECO Finance.

At the deadline, holders had tendered $171.8 million of 7.2% notes, $236.2 million of 7% notes and $191.2 million of 6¾% notes in the par-for-par exchange. As of 5 p.m. ET on Dec. 5, holders had tendered $169.8 million of 7.2% notes, $144.5 million of 7% notes and $191.2 million of 6¾% notes.

Noteholders who tendered under the par-for-par exchange offers by the early participation deadline also received the $20.00 early tender premium.

Any TECO Finance notes issued in the exchange offers will be fully and unconditionally guaranteed by TECO Energy.

Noteholders who participated in the exchange offer for new notes due 2017 whose notes were not accepted were automatically included in the par-for-par exchange offers.

The tender and exchange offers were part of TECO Energy's debt management plan, under which it plans to retire up to $500 million of TECO Energy debt obligations through 2010 and to make additional investments in Tampa Electric Co.

TECO Energy believes that extending the maturity and resetting the coupon on up to $300 million of its notes will cause its overall capital structure to better reflect that these notes were incurred to support its non-regulated businesses.

Global Bondholder Services Corp. (866 857-2200 or 212 430-3774) was the information agent.

TECO Energy is a Tampa, Fla.-based company engaged in diversified energy-related operations.

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