Sithe/Independence Funding begins tender offer for 9% bonds due 2013

By Angela McDaniels

Tacoma, Wash., Aug. 26 - Sithe/Independence Power Partners, LP subsidiary Sithe/Independence Funding Corp. has begun a tender offer for its $191,687,012 principal amount of 9% secured bonds due 2013, according to a news release. Sithe/Independence Power is a subsidiary of Dynegy Inc.

Sithe is also soliciting consents from the registered holders of the notes to some proposed amendments to the indenture governing the notes that would change the satisfaction and discharge provisions and eliminate some of the restrictive covenants, some events of default and other provisions.

The tender offer will expire at 11:59 p.m. ET on Sept. 23.

The company will pay $1,110.80 for each $1,000 principal amount of notes. This amount includes a consent payment of $30.00 for notes tendered with consents by 5 p.m. ET on Sept. 9.

Holders will also receive accrued interest up to but excluding the payment date, which is expected to be Sept. 12 for notes tendered by the consent payment deadline.

Sithe currently intends to satisfy and discharge the indenture and satisfy and discharge all notes on the initial payment date, although it has no legal obligation to do so.

The tender offer and consent solicitation are expected to be funded with cash on hand.

The offer is conditioned on the receipt of tenders for a majority of the notes by the consent payment deadline and the execution of a supplemental indenture giving effect to the proposed amendments.

The dealer manager is Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-2147). The depositary and information agent is D.F. King & Co., Inc. (212 269-5550 for brokers and banks, others call 800 488-8095).

New York-based Sithe/Independence Power Partners owns a natural gas-fired cogeneration facility. Houston-based Dynegy's subsidiaries produce and sell electric energy, capacity and ancillary services.

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