MarkWest gets needed consents to amend 8½% notes, reports early tender results for 8¾% notes

By Marisa Wong

Madison, Wis., Feb. 24 - MarkWest Energy Partners, LP announced that as of 5 p.m. ET on Feb. 23, the consent expiration or early tender date, it received tenders and consents from holders of about 99% of its outstanding 8½% senior notes due 2016 and tenders of about $165.5 million of its outstanding 8¾% senior notes due 2018.

MarkWest began tender offers on Feb. 9 for any and all of its $275 million of outstanding 8½% senior notes due 2016 and up to $125 million principal amount of its $500 million of outstanding 8¾% senior notes due 2018. The offers are scheduled to expire at 11:59 p.m. ET on March 9.

In connection with the tender offer for the 8½% notes, MarkWest solicited consents to certain proposed amendments that would eliminate substantially all of the restrictive covenants and some events of default in the indenture governing the notes.

Because the company received the needed majority in principal amount of the notes, it executed a supplemental indenture on the consent expiration date.

MarkWest said it also increased the tender cap for the 8¾% notes to $170 million from $125 million on the early tender date.

Holders who tendered their 8½% notes and delivered their consents by the consent expiration received the total payment of $1,072.50 for each $1,000 principal amount of notes, which included a $30.00 consent payment.

Holders tendering after the consent expiration will be eligible to receive only the tender offer payment of $1,042.50 for each $1,000 of 8½% notes, which does not include a consent payment.

The total payment for the 8¾% notes offer will be determined based on a modified Dutch auction procedure. The bid range is $1,090 to $1,115 per $1,000 principal amount. The total payment includes an early tender payment of $30 for each $1,000 of notes.

Holders who tender their 8¾% notes without specifying a bid price will be deemed to have specified $1,090 per $1,000 of notes. Holders will only be eligible to receive the early tender payment if the notes are tendered before the early tender date.

If the total amount of 8¾% notes tendered with a bid price less than or equal to the total payment exceeds the tender cap, then holders of notes with a bid price equal to the total payment will be subject to proration.

MarkWest said it will also pay accrued interest to but excluding the applicable payment date on the 8½% and 8¾% notes accepted for purchase. The initial settlement date for holders tendering 8½% notes by the consent expiration was Feb. 24. The final settlement date for both offers is March 10.

As previously reported, both tender offers were subject to completion of a debt financing for proceeds - when taken together with cash on hand and borrowings available under MarkWest's revolving credit facility - sufficient to fund the offers. The offering of $300 million of 6½% notes closed on Feb. 24.

Barclays Capital Inc. (212 528-7581 or 800 438-3242) is the dealer manager for the offer. D.F. King & Co., Inc. (800 431-9643 or, for banks and brokers, 212 269-5550) is the depositary and information agent.

MarkWest is a Denver-based master limited partnership engaged in the gathering, transportation and processing of natural gas.

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