North American Energy Partners calls 8¾% notes for April 28 redemption

By Angela McDaniels

Tacoma, Wash., March 29 - North American Energy Partners Inc. will redeem its $200 million principal amount of 8¾% senior notes due Dec. 1, 2011 on April 28, according to a company news release.

Holders will receive par plus accrued interest.

The company said it may purchase notes in the open market or by private contract prior to the redemption date.

The redemption will be funded with borrowings under the company's credit facility, existing cash and the proceeds from a private placement of C$225 million 9 1/8% series 1 senior unsecured debentures due 2017.

The company will also liquidate all of the related secured currency and interest rate swaps.

"The planned refinancing will move us from U.S. dollar-denominated debt into Canadian dollar-denominated debt, which is aligned with the currency of our operations," chief financial officer David Blackley said in the release. "The planned refinancing will also address our short-term refinancing risk, reduce our financial leverage and lower our overall cost of debt."

The company said it is exposed to interest rate risk due to the unwinding of its U.S. dollar interest rate swap in February 2009, and the effective interest rate on the 8¾% notes has increased above the hedged effective rate of 9.889% as a result.

North American Energy Partners provides heavy construction, mining, piling and pipeline services to oil, natural gas and resource companies. It is based in Edmonton, Alta.

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