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Southern Natural Gas to buy back $189 million of 7.35%, 8% notes
By Susanna Moon
Chicago, June 23 - Southern Natural Gas Co. said investors tendered $146.72 million principal amount of its 7.35% notes due Feb. 15, 2031 and $54.71 million of its 8% notes due March 1, 2032.
The tender offer for up to $189 million total of its $300 million of 7.35% notes and $300 million of 8% notes expired at midnight ET on June 20.
Southern Natural Gas said that because the total amount of 8% notes tendered exceeded the amount of the tender cap, the amount that would be accepted for purchase was prorated. The proration factor was 77.3%.
Settlement was expected to occur on Monday.
For each $1,000 principal amount of notes tendered by 5 p.m. ET on June 6, the payout will be $1,053.42 for the 7.35% notes and $1,129.84 for the 8% notes. These amounts include an early tender premium of $30.00.
Notes tendered after the early tender deadline will receive the same amount less the early tender premium.
The company said it will also pay accrued interest up to but excluding the settlement date.
The payouts were calculated on June 6 using the 4¾% Treasury due Feb. 15, 2037 and a fixed spread of 225 basis points.
As of the early tender deadline, holders had tendered $146.22 million of the 7.35% notes and $54.71 million of the 8% notes.
Previously, Southern Natural Gas said that if it receives tenders in excess of the cap, it will accept all 7.35% notes before it accepts any 8% notes, and notes will be accepted on a pro rata basis.
Merrill Lynch & Co. (888 654-8637 or 212 449-4914) and JPMorgan (866 834-4666 or 212 834-4802) were the dealer managers. Global Bondholder Services Corp. (866 952-2200 or 212 430-3774) was the depositary and information agent.
The Delaware company is involved in natural gas transportation and storage and liquid natural gas terminalling operations. It is a subsidiary of El Paso Corp., which provides natural gas and related energy products and is based in Houston.
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