Hanover Compressor subsidiaries call 8½%, 8¾% notes

By Angela McDaniels

Seattle, Aug. 17 - Hanover Compressor Co. said Hanover Equipment Trust 2001A will redeem all $133 million of its outstanding 8½% senior secured notes due 2008 and Hanover Equipment Trust 2001B will redeem all $250 million of its outstanding 8¾% senior secured notes due 2011.

The redemption date is Sept. 17, according to a company news release.

Holders will receive par plus accrued interest to the redemption date for the 8½% notes and 102.917% of par plus accrued interest for the 8¾% notes.

The trusts will fund the redemptions with the proceeds from a sale of leased gas compression equipment to Hanover Compression LP, another Hanover subsidiary. Proceeds from the sales are expected to total $404 million.

The redemptions are part of the refinancing plan being implemented by Hanover and Universal Compression Holdings, Inc. in connection with their merger, which is expected to occur on Monday.

Under the refinancing plan, the combined company, to be named Exterran Holdings, Inc., will use proceeds from a new senior secured credit facility to redeem or repurchase all of Hanover's and Universal's outstanding debt other than Hanover's convertible debt securities and the credit facility of Universal's publicly traded subsidiary, Universal Compression Partners, LP.

Hanover Compressor launched a tender offer for its $200 million of 8 5/8% senior notes due 2010, $200 million of 9% senior notes due 2014 and $150 million of 7½% senior notes due 2013 on Aug. 6. The offer expired on Friday.

Hanover Compressor is a natural gas compression services company based in Houston.

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