Anadarko sets pricing in maximum tender offer for three notes series

By Jennifer Chiou

New York, March 22 - Anadarko Petroleum Corp. announced pricing in the maximum tender offer for three series of notes issued by the company and Kerr-McGee Corp.

As previously reported, Anadarko Petroleum began two tender offers on March 9 for up to $1 billion principal amount of outstanding debt securities. It already reduced the maximum principal amount of notes to be purchased under the offers to $472,037,000.

For each $1,000 principal amount in the maximum tender offer, Anadarko is offering to purchase the $675 million of 6.875% notes due Sept. 15, 2011 issued by Kerr-McGee for a total consideration of $1,080.15 as well as the $169,748,000 of 6.125% notes due March 15, 2012 for $1,081.57 and $82,049,000 of 5% notes due Oct. 1, 2012 for $1,066.73, both issued by Anadarko. These notes are listed in order of acceptance priority level.

The purchase price for the notes was determined using a fixed spread over the yield calculated using the bid-side price of the specified U.S. Treasury. The prices were calculated at 2 p.m. ET on March 15 for the any and all offer and at 2 p.m. ET on March 22 for the maximum tender offer.

The reference yield for the 6.875% notes was 0.737%. It was 0.973% for the 6.125% notes and the 5% notes. The payout for the 6.875% notes was calculated using the 1% Treasury due Aug. 31, 2011 and a spread of 50 bps, while the payout for the 6.125% notes and the 5% notes was calculated using the 0.875% Treasury due Feb. 29, 2012 and a spread of 85 bps for the 6.125% notes and 125 bps for the 5% notes.

The purchase prices include a $30.00 early tender premium per $1,000 principal amount of notes tendered in the maximum tender offer before the early tender date, which was 5 p.m. ET on March 22.

The company will also pay accrued interest up to but excluding the settlement date, which is April 7 for the maximum tender offer.

The tender offer will expire at 5 p.m. ET on April 6.

The company previously announced that investors tendered $527,963,000, or 55.58%, of the $950 million of 6¾% senior notes due May 1, 2011 issued by Anadarko Finance Co. in the offer that ended at 5 p.m. ET on March 15.

The offers are subject to the satisfaction or waiver of some conditions that include the successful issuance of one or more new series of senior notes with net proceeds of at least $500 million.

The joint dealer managers are Deutsche Bank Securities Inc. (866 627-0391), Morgan Stanley & Co. Inc. (800 624-1808), Goldman Sachs & Co. (212 357-4692) and UBS Securities LLC (888 719-4210). The depositary and information agent is D.F. King & Co., Inc. (888 567-1626).

Anadarko is an oil and gas exploration and production company based in the Woodlands, Texas.

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