Tesoro sets pricing in tender for 8% notes, 9 5/8% notes due 2008, 9 5/8% notes due 2012

New York, Nov. 14 - Tesoro Corp. said it has fixed pricing in its tender offer for its $375 million of 8% senior secured notes due 2008, $211 million of 9 5/8% senior subordinated notes due 2008 and $429 million of 9 5/8% senior subordinated notes due 2012.

For the 8% notes due 2008 it will pay $1,052.46 per $1,000 principal amount, including a $30.00 consent payment, for the 9 5/8% notes due 2008 it will pay $1,052.06 per $1,000 principal amount, including a $30.00 consent payment, and for the 9 5/8% notes due 2012 it will pay $1,105.16 per $1,000 principal amount, including a $30.00 consent payment.

Pricing was fixed at 2 p.m. ET on Nov. 14.

The San Antonio-based refiner announced the tender on Oct. 31 and said it was also soliciting consents to eliminate substantially all the covenants and certain events of default in the note indentures.

For the 8% notes, Tesoro is paying an amount based on the bid-side yield of the 1½% Treasury note due March 31, 2006 plus 50 basis points.

For the 9 5/8% senior subordinated notes due 2012, the amount is based on the bid-side yield of the 3¾% Treasury note due March 31, 2007.

For the 9 5/8% senior subordinated notes due 2008, the price is $1,052.06 per $1,000 principal amount.

All the totals include a consent payment of $30.00 per $1,000 principal amount that will only be paid to holders who tendered with consents by 5 p.m. ET on Nov. 14.

The tender ends at 11:59 p.m. ET on Nov. 29.

Tesoro will also pay accrued interest up to but excluding the settlement date.

Completion of the offers is subject to various conditions including Tesoro obtaining debt financing on acceptable terms sufficient to pay, along with a "limited amount" of cash on hand, for all the notes tendered.

Holders who tender must consent and vice versa.

Lehman Brothers Inc. is dealer manager and solicitation agent (212 528-7581 or 800 438-3242). The tender agent and information agent is D.F. King & Co., Inc. (800 290-6431 or banks and brokerages call 212 269-5550).

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