Petro Stopping extends tender for discount notes

New York, Jan. 27 - Petro Stopping Centers Holdings LP (Caa3/CCC+) and Petro Holdings Financial Corp. extended their tender offer for their senior discount notes due 2008 to 5.00 p.m. ET on Feb. 3 from 5.00 p.m. on Jan. 27.

Petro Warrant Holdings Corp., a subsidiary, also extended its solicitation of consents to extend the mandatory purchase date of its warrants to Oct. 1, 2009 from Aug. 1, 2004.

As of 5.00 p.m. ET on Jan. 27, holders had tendered $107.945 million or 95.2% of the principal amount at maturity of the $113.37 million outstanding discount notes, up slightly from the $107.6 million principal amount at maturity at the last announcement on Jan. 21.

Petro Warrant Holdings had received consents from holders of 53.1% of its outstanding warrants, unchanged from previously.

On Jan. 21, Petro Stopping Centers and Petro Holdings Financial Corp. said holders had tendered $107.6 million principal amount at maturity of their $113.37 million outstanding principal amount at maturity of senior discount notes due 2008 by 5.00 p.m. ET on that day. They also revised the terms of the tender.

The response is up from $939,000 principal amount at the last announcement on Jan. 12.

As before, holders of 53.1% of the warrants issued by subsidiary Petro Warrant Holdings Corp. had given consents to the proposed change.

Under the most recent revised terms, the cash option was increased to $850 in cash per $1,000 principal amount at maturity ($919.09 in accreted value as of Dec. 31, 2003) of existing notes, up from $790 per $1,000 principal amount announced on Jan. 7.

The all-notes option was increased to $1,135.30 principal amount at maturity ($919.09 initial accreted value at Dec. 31, 2003) of new senior third secured notes due 2014 per $1,000 principal amount at maturity of the existing notes, up from $1,105.96 principal amount at maturity of new notes per $1,000 principal amount of the existing notes announced on Jan. 7.

Petro Stopping also raised the annual accretion and coupon interest rate on the new notes. It said the new notes will accrete until April 30, 2009 at a 4% annual rate, will bear cash interest at a 5% annual rate until April 30, 2009, and after that will bear cash interest at 12.5% - up from the terms announced on Jan. 7 under which the new notes would accrete until April 30, 2009 at 3.5% and pay cash interest at 5% until April 30, 2009 and after that pay cash interest at 11%.

The new notes will be callable at 100% of accreted value until April 30, 2009, and after that for 100% of the principal amount at maturity.

The issuers are continuing unchanged the consent solicitation under which they are looking to eliminate substantially all the restrictive covenants and events of default in the indenture of the existing notes.

The company said that any consents provided and any tenders of existing notes made after Jan. 12 may not be withdrawn. Persons who had previously tendered into the offer under the terms then outstanding have until 5 p.m. ET on Jan. 27 - the offer's scheduled expiration - to indicate whether they prefer the cash option or the new-note option for their consideration.

As previously announced, Petro Stopping, an El Paso, Texas-based travel plaza operator, began tendering for the notes and soliciting noteholder consents and warrant holder consents last fall as part of refinancing of its debt.

The tender offer and warrant consent solicitation were initially due to expire on Sept. 30, but were subsequently extended a number of times.

In connection with the offer, Petro Stopping Centers Holdings said it intends to refinance substantially all its existing debt to extend its debt maturities, to increase its financial flexibility and to take advantage of conditions in the debt markets.

The information agent is Global Bondholders Services (212 430-3774 or 866 470-4200).

As announced on Jan. 16, Petro Stopping Centers Holdings and Petro Holdings Financial are also conducting a tender offer and consent solicitation for all their outstanding 10½% senior notes due 2007.

The companies are offering to pay $1,020 in cash per $1,000 principal amount to holders who tender their notes and provide consents by 5.00 p.m. ET on Jan. 28. The total includes a $20 per $1,000 principal amount consent payment.

Holders who tender after that date but before the expiration date of 5.00 p.m. ET on Feb. 17 will receive par for the notes.

In both cases, Petro Stopping will also pay accrued interest up to but not including the relevant payment date.

The consent solicitation is to amend the indenture governing the notes to eliminate significantly all of the restrictive covenants and events of default provisions.

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