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Published on 1/4/2011 in the Prospect News Investment Grade Daily and Prospect News Liability Management Daily.

CenterPoint to start exchange for $762 million 7.875% notes due 2013

By Jennifer Chiou

New York, Jan. 4 - CenterPoint Energy, Inc. subsidiary CenterPoint Energy Resources Corp. announced plans to issue new senior notes due 2021 and cash in exchange for its $762 million of 7.875% senior notes due 2013.

The offer will end at midnight ET on Feb. 2.

Those who tender for exchange prior to 5 p.m. ET on Jan. 18 will receive the total exchange price, including a $30 early participation payment, for each $1,000 principal amount of 7.875% notes.

Those who tender after that time will not receive the early payment.

The total exchange price will equal the discounted value of the 7.875% notes on the early settlement date, excluding accrued interest, through the maturity date equal to the bid-side yield of a Treasury note as of 11 a.m. ET on Jan. 19 plus a fixed spread.

The total consideration will be payable in the following combination:

• Cash in an amount equal to 20% of the total exchange price; plus

• A principal amount of new notes equal to 80% of the exchange ratio multiplied by $1,000.

Also, the new notes are expected to form a single series with the notes that CenterPoint plans to issue on Jan. 11 in a private placement.

The offer is subject to the issue of the original 2021 notes, the reference yield for the new notes coming in at not less than a designated rate and the overall issue of at least $250 million of the new notes.

The withdrawal deadline is at 5 p.m. ET on Jan. 18.

CenterPoint is a Houston-based energy delivery company.


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