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PSEG unit to buy back $194.8 million of 7¾% notes in tender offer
By Susanna Moon
Chicago, April 27 - PSEG Power LLC said investors had tendered $194,796,000 of its 7¾% senior notes due 2011 as of midnight ET on April 26, unchanged from the amount tendered as of the early participation date.
The company said it would pay cash and issue 5 1/8% senior notes due April 15, 2020 in exchange for up to $250 million of its $800 million of 7¾% notes.
The new notes are fully and unconditionally guaranteed by PSEG Power's three principal operating subsidiaries.
After settlement of the exchange offer, $406,004,000 principal amount of the 5 1/8% notes will be outstanding.
PSEG previously said it would pay $1,066.59 for each $1,000 principal amount, including a $30.00 premium for notes tendered by the early participation date.
The payout includes $266.65 in cash and $801.04 principal amount of new notes and was based on a yield of 0.819%.
The payout for notes tendered after the early participation deadline would have been $1,036.59, consisting of $259.15 in cash and $778.51 principal amount of new notes.
The exchange price was determined using the bid-side yield on the 0.875% Treasury note due March 31, 2011 plus a fixed spread of 35 basis points.
The offer expired at midnight ET on April 26. It began on March 29. The early participation date was 5 p.m. ET on April 12.
PSEG Power said that the exchange ratio was the ratio determined by dividing the total exchange price by the new notes value, which was based on a pricing formula using the bid-side yield on the 3.625% Treasury due Feb. 15, 2020 plus a fixed spread of 130 bps.
Separately, the company issued $250 million of the new notes on April 5.
The company is a wholly owned subsidiary of Public Service Enterprise Group Inc., a Newark-based diversified energy company.
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