Harvest plans to redeem $236.58 million 7.5% convertibles due 2015

By Susanna Moon

Chicago, May 15 - Harvest Operations Corp. said it plans to redeem its $236,579,000 principal amount of outstanding 7.5% convertible unsecured subordinated debentures due May 31, 2015 using proceeds of a new notes issue.

Harvest will redeem the notes at par plus accrued interest on June 13, or a total price of $1,002.6712 per $1,000 principal amount.

Harvest said it expects holders will no longer want to convert debentures as the conversion price of $10 cash replaced the conversion into trust units. Holders who convert the notes today will receive, in exchange for their converted debentures, a cash payment that is less than the principal amount converted, according to a company press release.

The company closed $630 million principal amount of 2.125% senior notes due 2018 on Wednesday.

The notes are guaranteed by Harvest's parent company Korea National Oil Corp.

Proceeds from the new notes also will be used to repay Harvest's $390 million drawdown under its $400 million senior unsecured credit facility.

Harvest is an oil and natural gas company is based in Calgary, Alta.

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