El Paso prices $750 million 4.99% convertible preferreds with 25% premium

New York, April 11 - El Paso Corp. priced $750 million of 4.99% convertible perpetual preferred stock with a 25% initial conversion premium after the close Monday.

The conversion ratio is 76.7754 and the conversion price $13.03.

The deal priced in line with sweetened yield talk of 5% and at the cheap end of premium guidance of 25% to 30%.

The dividend had been boosted from the original price talk of 4.375% to 4.875% announced when the deal launched on April 5.

Pricing for the Rule 144A deal was delayed from Thursday when El Paso announced it would be making another restatement to previous earnings reports filed with the Securities and Exchange Commission.

Deutsche Bank Securities and Banc of America Securities are the joint bookrunners of the deal. Co-managers are Citigroup Global Markets Inc., Credit Suisse First Boston, Morgan Stanley, Merrill Lynch, Goldman Sachs, ABN Amro, BNP Paribas, Scotia Capital, SG Cowen, Hypo and Fortis.

The issue will be non-callable for five years, then with a 130% hurdle through maturity.

A $150 million greenshoe is available.

The Houston-based power company plans to use proceeds, plus cash on hand if needed, to redeem the $300 million of 8.25% cumulative preferred stock of subsidiary El Paso Tennessee Pipeline Co. and to prepay the estimated $442 million Western Energy settlement obligations.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.