Southern Natural Gas tenders for up to $189 million of 7.35%, 8% notes

By Jennifer Chiou

New York, May 23 - Southern Natural Gas Co. said it launched a cash tender offer for up to $189 million total of its $300 million of 7.35% notes due Feb. 15, 2031 and $300 million of 8% notes due March 1, 2032.

The notes are listed in order of priority acceptance level.

The offer ends at midnight ET on June 20.

For each $1,000 principal amount, the payouts will be calculated using the 4¾% Treasury due Feb. 15, 2037 and a fixed spread of 225 basis points. Pricing will be set at 2 p.m. ET on June 6.

Those who tender by 5 p.m. ET on June 6 will receive the $30.00 per $1,000 principal amount early tender premium.

Southern Natural Gas said that if it receives tenders in excess of the cap, it will accept the notes on a pro rata basis. The company added that it may raise the tender cap.

Merrill Lynch & Co. (888 654-8637 or 212 449-4914) and JPMorgan (866 834-4666 or 212 834-4802) are the dealer managers. Global Bondholder Services Corp. (866 952-2200 or 212 430-3774) is 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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