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Southern Natural Gas prices tender offer for up to $189 million of 7.35%, 8% notes
By Angela McDaniels
Tacoma, Wash., June 9 - Southern Natural Gas Co. determined what it will pay to participants in its 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, according to a company news release.
For each $1,000 principal amount of notes tendered by 5 p.m. ET on June 6, the payout will be $1,053.42 for the 7.35% notes and $1,129.84 for the 8% notes. These amounts include an early tender premium of $30.00.
Notes tendered after the early tender deadline will receive the same amount less the early tender premium.
The company said it will also pay accrued interest up to but excluding the settlement date, which is expected to be June 23.
The payouts were calculated on June 6 using the 4¾% Treasury due Feb. 15, 2037 and a fixed spread of 225 basis points.
The tender offer ends at midnight ET on June 20.
As of the early tender deadline, holders had tendered $146.22 million of the 7.35% notes and $54.71 million of the 8% notes.
Previously, Southern Natural Gas said that if it receives tenders in excess of the cap, it will accept all 7.35% notes before it accepts any 8% notes, and notes will be accepted 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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