Suburban Propane plans to use issue proceeds to fund 6 7/8% notes tender; remaining to be called

By Jennifer Chiou

New York, March 10 - Suburban Propane Partners, LP and subsidiary Suburban Energy Finance Corp. announced the funding source for the cash tender offer for their $250 million of 6 7/8% senior notes due 2013.

They intend to use proceeds from an upsized $250 million issue of 7 3/8% 10-year senior notes (Ba3/BB-/), which priced at 99.136 to yield 7½% on Wednesday.

In addition, they intend to redeem any remaining notes outstanding after the offer is complete.

The companies also are soliciting consents from holders of a majority of notes to amend the indenture to eliminate some covenants and default provisions.

The offer will end at midnight ET on April 5. It began on March 9.

Holders who tender their notes by 5 p.m. ET on March 22, the consent deadline, will receive $1,025.42 for each $1,000 principal amount of notes, including a consent payment of $30.00 per note.

There is an early settlement option, and holders who tender notes by the consent deadline could receive payment as early as March 23.

The settlement date for notes tendered after the consent date is expected to be April 6.

Suburban said the closing of the offer requires receipt of the required consents to amend and supplement the notes indenture and the completion of the aforementioned senior debt offering.

The offer is not conditioned on a minimum tender amount.

Bank of America Merrill Lynch (attn: debt advisory services group; 888 292-0070 or collect 980 388-4603) is the dealer manager. D.F. King & Co., Inc. (800 488-8035 or collect 212 269-5550) is the information agent. The Bank of New York Mellon (212 815-3687) is the depositary.

Suburban Propane Partners supplies propane, fuel oil and related products and services and markets natural gas and electricity. The Whippany, N.J.-based company is structured as a master limited partnership.

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