Colorado Interstate Gas tenders for up to $100 million total of 5.95%, 6.8% notes

By Jennifer Chiou

New York, May 23 - Colorado Interstate Gas Co. announced the start of a cash tender offer to purchase up to $100 million total of any and all of its $75 million of 5.95% senior notes due March 15, 2015 and some of its $400 million of outstanding 6.8% senior notes due March 15, 2015.

The notes are listed in acceptance priority level.

For each $1,000 principal amount, the company said that it will calculate its payouts using the 3 7/8% Treasury due May 15, 2018 and a fixed spread of 200 basis points. The payout will include an early tender premium of $30.00 for those who tender by 5 p.m. ET on June 6.

Holders will also receive accrued interest to the settlement date.

Pricing will be fixed at 2 p.m. ET on June 6.

The company said that if it receives tenders in excess of the cap, it will accept the notes on a pro rata basis. Colorado Interstate Gas noted that it may increase the tender cap.

The offer ends at midnight ET on June 20.

There is no minimum tender condition.

The offers are part of the company's previously announced plan to reduce its outstanding debt by about $225 million.

Merrill Lynch & Co. (888 654-8637 or 212 449-4914) and JPMorgan (866 834-4666 or 212 834-4802) are the dealer managers. Global Bondholder Services Corp. (866 952-2200 or 212 430-3774) is the depositary and information agent.

Colorado Interstate Gas is a Delaware general partnership that transports, stores and processes natural gas. It is a subsidiary of El Paso Corp., which provides natural gas and related energy products and is based in Houston.

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