Semco Energy gets tenders for nearly all 7 1/8%, 7¾% notes

By Angela McDaniels

Tacoma, Wash., Nov. 9 - Semco Energy, Inc. said it accepted for purchase $145.08 million, or 96.7%, of its 7 1/8% senior notes due 2008 and $199.87 million, or 99.9%, of its 7¾% senior notes due 2013.

A tender offer and consent solicitation for the notes began on Oct. 10. The tender offer ended at 10 a.m. ET on Friday, and the consent deadline was 5 p.m. ET on Oct. 23.

The consents allowed the company to eliminate substantially all of the restrictive covenants and some events of default in the note indentures. The supplemental indentures containing the amendments became effective once Semco Energy accepted the tendered notes for purchase.

For each $1,000 principal amount, the company paid $1,012.59 for the 7 1/8% notes and $1,053.58 for the 7¾% notes.

The payouts included a consent payment of $30.00 for each note tendered by the consent deadline.

Holders also received accrued interest up to but excluding the payment date, which was Friday.

The payouts were determined on Oct. 24 based on a fixed spread of 50 basis points over the yield of the 5 5/8% U.S. Treasury note due May 15, 2008. The reference yield was 4.129%.

The tender offer was conditioned on the completion of Cap Rock Holding Corp.'s acquisition of Semco Energy's common stock and 5% series B preferred stock for $8.15 and $213.07 per share, respectively. The companies announced the completion of the acquisition on Friday.

Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-0652) was the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 290-6431 or 212 269-5550) was the information agent.

Semco Energy is a natural gas distributor based in Port Huron, Mich. Cap Rock is a Midland, Texas, utility holding company.

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