Suburban again extends consent date in exchange offer for Inergy notes

By Susanna Moon

Chicago, June 22 - Suburban Propane Partners, LP and Suburban Energy Finance Corp. again extended the consent date in the exchange offers for the $1.2 billion principal amount of 7% senior notes due 2018 and 6 7/8% senior notes due 2021 issued by Inergy, LP and Inergy Finance Corp.

The consent deadline is now 5 p.m. ET on June 26, extended from 5 p.m. ET on June 21, according to an 8-K filed Friday by Suburban Propane with the Securities and Exchange Commission.

The consent deadline was originally set for May 16 and was extended to May 18, May 23, May 31, June 7 and June 14 before the most recent extension.

The exchange offers are still set to end at 11:59 p.m. ET on July 6.

Sweetened offer

Along with the most recent extension on June 15 the companies also increased the consent payment and coupons of the new Suburban Energy notes and made other changes to the terms of the offers.

The Suburban companies will pay a total of $50 million in cash to holders who deliver consents by the deadline. The total consent payment was previously set at $30 million.

Assuming that consents are delivered for all $1.2 billion of the Inergy notes, the cash consent payment will be $41.67, up from $25.00, per $1,000 principal amount. Assuming that consents are delivered for $1 billion of the notes, the premium will be $50, up from $30, per $1,000 of notes.

Suburban originally offered to pay a cash consent fee of $3.75 per $1,000 principal amount of notes.

As of June 14, about 34% of the outstanding principle amount of Inergy notes had been tendered. Holders may no longer withdraw tendered notes.

Early on Suburban said it may lower the minimum tender condition requiring tenders for at least $1 billion of notes. In a previous news release, Suburban said it continues to reserve the right to lower the minimum tender condition.

Suburban is soliciting consents to amend the Inergy notes to delete all of the restrictive covenants, modify the covenants regarding mergers and consolidations and eliminate events of default. The amendments require the consent of a majority of holders of the outstanding principal amount of each series of Inergy notes.

Exchange offers

In exchange for tendered Inergy notes, the companies are offering $1 billion principal amount of new 7¼% senior notes due 2018 and 7 1/8% senior notes due 2021 issued by Suburban Energy plus $200 million in cash. The coupon for the 2018 notes was increased from 7%, and the coupon on the 2021 notes was increased from 6 7/8%.

As noted before, each new series of notes will have substantially the same terms - except for the coupon, which was recently raised - as the corresponding series of outstanding Inergy notes for which they are being offered in exchange, including interest payment dates, optional redemption terms and maturity.

The offers are in connection with, and conditioned upon, the acquisition of Inergy's retail propane operations.

The offers, which began on May 3, were originally set to expire at 11:59 p.m. ET on May 31.

Suburban Propane initially announced the offers on April 26. It said that it received a commitment to increase its revolving credit facility to $400 million from $250 million and that it planned on issuing $1 billion of 7% senior notes due 2018 and 6 7/8% senior notes due 2021.

Global Bondholder Services Corp. (866 387-1500 or collect 212 430-3774) is the information agent for the exchange offers.

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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