El Paso completes oversubscribed tender for seven series of notes

By Jennifer Chiou

New York, Jan. 4 - El Paso Corp. announced the final results of its $800 million cash tender offer for seven series of its notes.

At the close of the offer at 11:59 p.m. ET on Dec. 30, the company had received total tenders for:

• $40.93 million of its $151.33 million of 12% senior notes due 2013;

• $396,788,000 of its $500 million of 8¼% senior notes due 2016;

• $88,413,000 of its $193.01 million of 7% senior notes due 2011;

• $120,736,000 of its $347.68 million of 7 5/8% senior notes due 2011;

• $20,968,000 of its $49.11 million of 9 5/8% senior notes due 2012;

• $75,296,000 of its $229 million of 7 7/8% senior notes due 2012; and

• $32,891,000 of its $131.48 million of 7 3/8% senior notes due 2012.

The company tendered for any and all of the 12% notes and 8¼% notes, both of which had an acceptance priority level of 1. The 7% notes and 7 5/8% notes had an acceptance priority level of 2 while the remaining notes were in third for the maximum tender offer.

El Paso already said that it would first accept notes with a top priority level, subtracting those tenders from the $800 million cap.

The company accepted all tenders for the first-priority notes, including $40.69 million of the 12% notes and $386,458,000 of the 8¼% notes for early settlement following the early tender date of 5 p.m. ET on Dec. 13.

El Paso also accepted all tendered second-priority notes while the third-priority notes had a proration factor of 48.2%, resulting in the acceptance of $10,118,000 of the 9 5/8% notes, $36,326,000 of the 7 7/8% notes and $15,865,000 of the 7 3/8% notes.

At the early deadline, holders had tendered $88,243,000 of the 7% notes, $120,629,000 of the 7 5/8% notes, $20,321,000 of the 9 5/8% notes, $75,226,000 of the 7 7/8% notes and $32,836,000 of the 7 3/8% notes.

As already stated, factoring in the early tenders in the any and all offer for the top-priority notes, that left $294,642,450 for the maximum tender for the remaining notes series. With the subsequent tenders for the top-priority notes, this left $282,519,400 for the maximum tender offer.

For each $1,000 principal amount, holders received $1,260.00 for the 12% notes, $1,175.00 for the 8¼% notes, $1,020.00 for the 7% notes, $1,032.50 for the 7 5/8% notes, $1,105.00 for the 9 5/8% notes, $1,082.50 for the 7 7/8% notes and $1,083.75 for the 7 3/8% notes. These amounts included a $30.00 early payment for those who tendered prior to 5 p.m. ET on Dec. 13.

Holders also received accrued interest.

The 7 5/8% notes were issued by Sonat, Inc., which was merged into El Paso Energy Corp., whose name was later changed to El Paso Corp. The 7 3/8% notes were issued by El Paso Energy.

The dealer managers were Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and RBC Capital Markets, LLC (877 381-2099 or 212 618-7822).

Global Bondholder Services Corp. (212 430-3774 for banks and brokers; 866 470-4300 for all others) was the depositary and information agent.

The El Paso-based issuer provides natural gas and related energy products.

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