Dynegy completes restructure moves, note tender expires

New York, Aug. 11 - Dynegy Inc. (B3/B) said that it had closed a series of previously announced refinancing and restructuring transactions, including its tender offer for three series of its outstanding senior notes (the 8 1/8% notes due 2005, the 6¾% notes due 2005 and the 7.450% notes due 2006).

The tender offer expired as scheduled on Aug. 8 without extension. As of the expiration, $612 million of the notes had been tendered out of the $650 million total outstanding.

Among the transactions which Dynegy said had been completed were its offering of $1.45 billion in new second priority senior secured notes and $175 million in convertible subordinated debentures, the pricing of which was announced on Aug. 1, and the exchange of the $1.5 billion series B preferred stock previously held by a subsidiary of ChevronTexaco Corp. Dynegy said it also received approximately $40 million from ChevronTexaco relating to the return of certain prepaid amounts previously held by ChevronTexaco. A portion of the net proceeds was used to pay for the bond tender offers.

As previously announced, Dynegy, a Houston-based energy producer, said on July 15 that it would tender for its $300 million of 8 1/8% notes, its $150 million of 6¾% notes and its $200 million of 7.450% notes, and that it would also seek noteholder consents to proposed indenture amendments that would eliminate several of the restrictive covenants and certain related provisions currently contained in the notes' respective indentures.

Dynegy set a now-expired consent deadline of 5 p.m. ET on July 24, and said the tender offer would expire at midnight ET on Aug. 8, with both deadlines subject to possible extension.

The company said it would offer $1,000 per $1,000 principal amount of the 8 1/8% notes tendered and accepted for purchase and $980 per $1,000 principal amount of 6¾% and 7.45% notes. All tendering holders would also receive accrued and unpaid interest up to but excluding the date of purchase.

It added that holders validly tendering their notes by the consent deadline and thus consenting to the proposed indenture changes would be eligible to receive a $20 per $1,000 principal amount consent payment.

The company said it expected to make payment of the tender offer consideration for validly tendered notes and the consent fee for valid consents received prior to the consent payment deadline promptly following the tender offer expiration.

Dynegy said that completion of the tender offer and consent solicitation would be subject to the completion of proposed capital markets transactions the company announced concurrently with the tender offer, and the effectiveness of a proposed amendment to its credit facility, among other factors.

Dynegy said on July 24 that it that it had obtained consents from approximately 90% of its noteholders by the consent deadline at 5 p.m. ET that day, consisting of tenders and consents representing $279.774 million or 93% of its $300 million 8 1/8% notes, $133.543 million or 89% of its $150 million 6¾% notes and $169.159 million or 85% of its 7.45% notes.

Dynegy said it would execute and deliver supplemental indentures for each series of notes with the amendments, which would only become operative when validly tendered notes are purchased under the tender offer.

On July 28, Dynegy said that it had received more than 99% approval from its lenders to consummate the restructuring and refinancing transactions, including the tender offers for the three series of notes. The company said that only 67% approval from its lenders had been required.

High yield syndicate sources meanwhile said that the company was heard to be planning to sell $1.325 billion of new 10-year and 12-year notes - up slightly from the previously mentioned figure of $1.2 billion, apparently due to the accompanying cut in size of a previously proposed concurrent convertibles offering to $175 million from $300 million (high yield syndicate sources said that the sale of $1.45 billion in new notes took place on Aug. 1).

MacKenzie Partners, Inc. was the information agent for the tender offer (800 322-2885).

Resource America buys back $11.3 million 12% notes

New York, Aug. 11 - Resource America, Inc. said it has bought back $11.3 million of its 12% senior notes due 2004 since June 30.

Following the repurchases, the Philadelphia-based proprietary asset management company has $54.0 million of the notes outstanding out of the $115.0 million issued in July 1997.

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