Aquila extends tender offer, will accept up to $350 million of notes

By Jennifer Chiou

New York, June 8 - Aquila Inc. said it has again increased the maximum amount of senior notes it will be obliged to accept during its tender offer, this time to $350 million.

It previously had maximum amounts of $250 million and before that $150 million.

The company also extended the expiration to midnight ET on June 23 from midnight ET on June 9.

As of 11:30 a.m. ET on June 9, the company said it received tenders from holders of $84.49 million of its $85.9 million 6.7% senior notes due Oct. 15, $22.269 million of its $36.905 million 8.2% senior notes due Jan. 15, 2007, $130.501 million of its $199 million 7 5/8% senior notes due Nov. 15, 2009, $115.291 million of its $250 million 9.95% senior notes due Feb. 1, 2011 and $129.882 million of its $197 million of 7¾% senior notes due June 15, 2011.

The company previously said that the tender considerations for the 6.7% notes and 8.2% notes are $1,003.77 and $1,015.12, respectively.

The consideration for the 6.7% notes was determined using the yield to maturity of the 6½% Treasury due Oct. 15, 2006 and 50 basis points. For the 8.2% notes, the formula is the 3 1/8% Treasury due Jan. 31, 2007 and 50 bps.

For each $1,000 principal amount of the other series of notes, Aquila said it will pay $1,046.25 for the 7 5/8% notes, $1,135 for the 9.95% notes and $1,060 for the 7¾% notes.

The considerations include a $20.00 early tender payment per $1,000 principal amount of notes for noteholders who tendered by 5 p.m. ET on May 25, the early deadline.

At the early deadline, the company had received tenders from holders of $482 million of notes, or 63% of the notes outstanding.

The offer is part the company's debt reduction plan.

Citigroup Corporate and Investment Banking is the dealer manager (800 558-3745 or call collect 212 723-6106). Global Bondholder Services Corp. is the information agent and depository (866 294-2200).

Based in Kansas City, Mo., Aquila operates electric power generation and electric and natural gas transmission and distribution utilities.

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