Energy Transfer sets pricing in tender for four series of notes

By Jennifer Chiou

New York, Jan. 23 - Energy Transfer Partners, LP announced the pricing terms set at 2 p.m. ET on Jan. 23 for the second of two tender offers.

For each $1,000 principal amount, the company will pay a total consideration of

• $1,256.13 for the $600 million of 9.7% senior notes due 2019;

• $1,223.90 for the $650 million of 9% senior notes due 2019;

• $1,156.22 for the $350 million of 8.5% senior notes due 2014; and

• $1,067.27 for the $350 million of 6% senior notes due 2013.

The company previously said that investors tendered $291.95 million, or 72.99%, of its $400 million of 5.65% senior notes due 2012 in the other of two offers for up to $750 million principal amount of the five series of notes.

The prices in the maximum tender offer for the four series include an early tender premium of $30.00 for each note tendered by the early tender date, which was 5 p.m. ET on Jan. 23.

As announced, Energy Transfer is offering to purchase an amount of the four series of notes, listed above in order of acceptance priority, equal to the difference between $750 million and the principal amount of notes purchased through the first offer for the 5.65% notes.

The offer for the 5.65% notes expired at 5 p.m. ET on Jan. 18. Holders may continue to tender notes under the other tender offer until 11:59 p.m. ET on Feb. 6. The settlement date is expected to be Feb. 7.

The company said on Jan. 9 that it was tendering for any and all of its 5.65% notes at a price of $1,028.40 per $1,000 principal amount.

There is a $200 million sublimit for the 9.7% notes and a $200 million sublimit for the 9% notes.

The purchase prices for the notes was determined using a fixed spread over the yield of a reference Treasury, which was the 2% Treasury due Nov. 15, 2021 for the 9.7% notes and the 9% notes and the 0.125% Treasury due Dec. 31, 2013 for the 8.5% notes and the 6% notes.

The fixed spread was 325 basis points for the 9.7% notes, 315 bps for the 9% notes, 100 bps for the 8.5% notes and 90 bps for the 6% notes.

In both offers, the company will pay accrued interest up to but excluding the settlement date.

The tender offers are subject to conditions that include, among other things, the completion of Energy Transfer Partners' plan to contribute substantially all of its propane operations to AmeriGas Partners, LP in exchange for about $2.9 billion.

The dealer managers are J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) and UBS Securities LLC (888 719-4210 or 203 719-4210). The information agent is D.F. King & Co., Inc. (800 859-8508).

Dallas-based Energy Transfer Partners owns and operates a portfolio of energy assets.

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