Petro Stopping extends tender offer

New York, Dec. 24 - Petro Stopping Centers Holdings LP (Caa3/CCC+) and Petro Holdings Financial Corp. said they have extended their amended tender offer for their $113.37 million principal amount at maturity of senior discount notes due 2008.

The offer will now expire at 5.00 p.m. ET on Dec. 31, pushed back from 5.00 p.m. ET on Dec. 24.

As of the old deadline, holders of $51,000 principal amount of the notes had tendered and given consents for 53.1% of the outstanding warrants.

Under the amended offer announced Dec. 9, holders are being offered two options: all cash or cash and notes.

Under the all-cash alternative, holders will receive $670 in cash for each $1,000 principal amount at maturity ($919.09 in accreted value as of Dec. 31, 2003) of existing notes tendered and accepted.

Under the note and cash option, holders will receive $1,001.31 principal amount at maturity ($833.70 in initial accreted value at Dec. 31, 2003) of new senior third secured notes due 2014 and $85.39 in cash for each $1,000 principal amount at maturity ($919.09 in accreted value at Dec. 31, 2003) of existing notes tendered and accepted. The new notes will accrete until April 30, 2009 at 3.5% per annum and also pay cash interest at 5% per annum until April 30, 2009. After that they will pay cash interest at 11%. The new notes will be callable at 100% of accreted value until April 30, 2009 and at par after that.

The issuers continued unchanged the consent solicitation under which they are looking to eliminate substantially all the restrictive covenants and events of default in the indenture of the existing notes. Petro Warrant Holdings Corp. is continuing to solicit consents to extend the mandatory purchase date of the outstanding warrants.

Petro Stopping said it anticipates its largest bondholder, with 54% of the outstanding principal amount of the existing notes, will tender into the offer and select the note and cash option.

The tender was initially due to expire on Sept. 30.

As previously announced, the transaction is part of the El Paso, Texas-based travel plaza operator's refinancing of its debt.

The company was originally offering $242.57 in cash and $1030.30 in principal amount at maturity of new senior second secured discount notes due 2014 for each $1,000 principal amount at maturity of the existing notes. The new notes would have accrued cash interest at 14% beginning Oct. 1, 2009.

In connection with the offer, Petro Stopping Centers Holdings said it intends to refinance substantially all its existing debt in order to extend its debt maturities, to increase its financial flexibility and to take advantage of current conditions in the debt markets.

The information agent is Global Bondholders Services (212 430-3774 or 866 470-4200).

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