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Sierra Pacific Resources starts exchange for PIES
New York, April 15 - Sierra Pacific Resources said it has begun an exchange for its Premium Income Equity Securities, offering new PIES that have different remarketing provisions for the underlying notes.
The Reno, Nev., electric and gas utility said the change is intended to allow it to take advantage of favorable marketing provisions.
The exchange covers up to 4.704 million of the outstanding PIES, or $235.218 million. Only 97.9% of the existing PIES are covered in order to ensure they continue to be listed on the New York Stock Exchange.
In addition to the one-for-one exchange, Sierra Pacific will also pay an exchange fee of $0.125 per PIES.
Under the terms of the new PIES, the company will be able to remarket the underlying senior notes before Aug. 10, 2005. The existing PIES do not allow remarketing until that date.
Sierra Pacific will also be able to change some terms of the senior notes including the maturity date, which may be extended to a maximum of 11 years from the remarketing settlement date, the call features, the interest payment dates and the addition of covenants. As at present, the interest rate will be reset in the remarketing.
Sierra Pacific is also proposing to change the remarketing from a fixed period to multiple three-day remarketing periods to give greater flexibility.
"We believe that the added flexibility provided under the new PIES will increase the likelihood that we will be able to achieve a successful remarketing of the senior notes on economically attractive terms and will allow us to better manage the maturity profile of our debt," Sierra Pacific said in an S-4 filing with the Securities and Exchange Commission.
The exchange runs through 5 p.m. ET on May 18.
Morrow & Co. is the information agent (800 607-0088, banks and brokerages 800 654-2468, or call collect 212 754-8000). Merrill Lynch, Pierce, Fenner & Smith Inc. and Lehman Brothers Inc. are dealer managers.
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