Inergy settles oversubscribed tender for $150 million of 6 7/8% notes

By Susanna Moon

Chicago, Dec. 29 - Inergy LP said investors tendered more than $150 million of its $750 million of 6 7/8% senior notes due 2021 as of the early tender deadline at 5 p.m. ET on Dec. 28 and that, as a result, it will purchase $150 million of the notes on a prorated basis later on Dec. 29.

As previously noted, the company will pay $1,025 for each $1,000 principal amount, including an early tender premium of $30 per note.

Holders will also receive accrued interest up to the settlement date.

The company offered to purchase up to $150 million total of its 6 7/8% notes and $600 million of 7% senior notes due 2018. The acceptance priority level was one for the 6 7/8% notes and two for the 7% notes.

Inergy said on Dec. 19 that it lowered the maximum amount of notes it would buy in the tender offer for the two series of notes to $150 million from $300 million.

The company previously said it made the change because the proceeds from Inergy Midstream, LP's initial public offering of common units was less than expected. The smaller cap will result in a smaller amount of debt outstanding under the company's revolving credit facility.

The tender offers were slated to expire at 11:59 p.m. ET on Jan. 5, but the company said it would accept no more notes under the offer and that it would return any 7% notes tendered under the offer.

The total purchase price for the 7% notes was going to be $1,040 per $1,000 principal amount of notes tendered by the early deadline, including an early tender premium of $30 per note.

Offer for 8¾% notes

Inergy said on Dec. 21 that it had received tenders and consents from holders of $94,235,000 principal amount, or more than 99%, of its $95,041,000 of 8¾% senior notes due 2015 as of the consent deadline at 5 p.m. ET on Dec. 20.

As a result, Inergy executed a supplemental indenture to the notes eliminating most of the covenants and default provisions. The changes were to become operative when the company purchased the tendered notes on Dec. 21.

The company previously said that holders may continue to tender notes until 11:59 p.m. ET on Jan. 5.

As previously noted, Inergy solicited consents to amend the 8¾% notes. Holders who tender must deliver consents and vice versa. The offer for the 8¾% notes required consents from holders of a majority of the notes.

The payment on offer for the 8¾% notes is $1,140 per $1,000 principal amount, including a consent fee of $30 for noted tendered by the consent date.

Inergy will also pay accrued interest up to the settlement date.

Barclays Capital Inc. (800 438-3242 or 212 528-7581), Morgan Stanley & Co. LLC (800 624-1808) and SunTrust Robinson Humphrey, Inc. (404 926-5051) are the joint dealer managers, and D.F. King & Co., Inc. (800 290-6426, banks and brokers call 212 269-5550) is the depositary and the information agent.

Inergy is a Kansas City, Mo., master limited partnership with operations that include the retail marketing, sale and distribution of propane. It also operates a natural gas storage business, a liquid petroleum gas storage business, a solution-mining and salt production company and a propane supply logistics, transportation and wholesale marketing business.

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