China’s ENN Energy accepts $349.46 million 6% bonds in tender offer

By Angela McDaniels

Tacoma, Wash., Nov. 29 – ENN Energy Holdings Ltd. set pricing in the modified Dutch auction tender offer for its $750 million 6% bonds due 2021 and increased the maximum principal amount of bonds it will purchase, according to a company news release.

As of the early participation date, 5 p.m. ET on Nov. 28, holders had tendered $396,901,000 principal amount of notes.

The tender cap was increased to $349,457,000 from $300 million. Because the offer was oversubscribed as of the early participation date, no notes tendered after that date will be accepted.

The total consideration is $1,117.42 per $1,000 principal amount of notes. This includes an early premium of $30.00 for each note tendered by the early participation date.

The company will also pay accrued interest.

Holders who tendered their notes had to specify a maximum spread above the 1.25% U.S. Treasury due Oct. 31, 2021 they would accept to determine the total consideration. The maximum spread had to be between 125 basis points and 145 bps.

Pricing was set at 8 a.m. ET on Nov. 29 assuming a final payment date of Dec. 16. The reference yield is 1.827%. The clearing spread is 130 bps, which is equal to the base spread of 160 bps less the clearing spread premium of 30 bps. Notes tendered at a bid price that results in a clearing spread of 130 bps will not be prorated.

The tender offer began Nov. 14 and will end at 11:59 p.m. ET on Dec. 12.

Bonds repurchased through the offer will be canceled.

The company has purchased $35 million principal amount of the notes via open-market purchases. These notes were not canceled, and the company did not tender these notes in the offer.

The company said the offer is being made to reduce foreign-exchange risk and to optimize the group’s capital structure.

Nomura International (Hong Kong) Ltd. (liability.management@nomura.com or +44 20 7103 6597) and HSBC Ltd. (+852 2822 4100, 212 525-5552 or liability.management@hsbcib.com) are the dealer managers. Lucid Issuer Services Ltd. (ennenergy@lucid-is.com or +44 20 7704 0880) is the tender agent.

ENN Energy is a Lanfang, China-based investment holding company that invests in, operates and manages gas pipeline infrastructure and sells and distributes gas.

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