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Kerr-McGee obtains required consents to amend four series of notes
By Jennifer Chiou
New York, Sept. 22 - Kerr-McGee Corp. said it received consents from a majority of noteholders to amend the indentures of four series of notes.
The company obtained tenders from holders of 90% of $2,131,930,000 of notes, which included $306.93 million 5 7/8% notes due 2006, $675 million 6 7/8% notes due 2011, $500 million 7 7/8% notes due 2031 and $650 million 6.95% notes due 2024.
The Oklahoma City-based energy and inorganic chemical company was seeking to release its chemical business subsidiary, Kerr-McGee Chemical Worldwide LLC, as a guarantor of the notes if the subsidiary is spun off or separated through an initial public offering.
Kerr-McGee previously announced in intends to separate its chemical business, with proceeds to go towards debt reduction.
At present, Kerr-McGee Chemical Worldwide would be released as a guarantor if it is sold in its entirety, but Kerr-McGee said it is considering a transaction that would not involve a complete sale.
Kerr-McGee will pay an initial consent fee of $2.50 per $1,000 to holders who give consents. If the subsidiary is subject to an IPO, a spin off or a split off, Kerr-McGee will pay a further fee of $1.25 per $1,000 to holders of the 5 7/8% notes for a total of $3.75, $3.75 per $1,000 for the 6 7/8% notes for a total of $6.25, and $10.00 per $1,000 for the 7 7/8% notes and 6.95% notes for a total of $12.50.
The consent solicitation ended at 5 p.m. ET on Sept. 21.
Lehman Brothers is solicitation agent (call collect 212 528-7581 or 800 438-3242). Global Bondholder Services Corp. is supplying documentation (banks and brokers call 212 430-3774, others call 866 470-4500).
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