CenterPoint prices exchange offer for 7.875% notes after early date

By Susanna Moon

Chicago, Jan. 19 - CenterPoint Energy, Inc. subsidiary CenterPoint Energy Resources Corp. said investors had tendered $397,236,000 of its $762 million of 7.875% senior notes due 2013 as of 5 p.m. ET on Jan. 18, the early participation date in the exchange offer.

Holders are being offered new senior notes due 2021 and cash.

The exchange offer will end at midnight ET on Feb. 2. It began on Jan. 5.

The total exchange price is $1,146.25 for each $1,000 principal amount, consisting of $286.56 in cash and $863.62 principal amount of new notes. The price per $1,000 principal amount of new notes, excluding accrued interest, will be $995.45.

Those who tendered for exchange by the early date will receive the total exchange price, which includes a $30.00 early participation payment for each $1,000 principal amount of 7.875% notes. Those who tender after that time will not receive the early payment.

The exchange price was set using a yield of 1.117%. The price is equal to the discounted value on the early settlement date of the remaining principal and interest payments on the 7.875% notes, excluding accrued interest, through the maturity date calculated using the bid-side yield of the 2.5% Treasury note due March 31, 2013 as of 11 a.m. ET on Jan. 19 plus 50 basis points.

The exchange ratio was determined by dividing the total exchange price by the new notes value, which equals the discounted value on the early settlement date of the remaining payments of principal and interest, excluding accrued interest, through the maturity of the new notes calculated at the pricing time using the greater of (a) the bid-side yield on the 2.625% U.S. Treasury note due Nov. 15, 2020 and (b) 2.85% plus, in each case, 120 bps.

The new notes are expected to form a single series with the notes that CenterPoint issued for cash on Jan. 11.

Interest on the new notes will accrue from the issuance date of the new notes issued for cash. The first interest payment following the settlement date of the exchange offer will include the interest accrued from the issuance date up to but excluding the settlement date of the exchange offer.

Each holder whose 7.875% notes are accepted for exchange will receive a cash payment representing interest, if any, that has accrued up to but excluding the settlement date, reduced by the interest accrued on the new notes up to but excluding the settlement date.

The offer is subject to the completion of the new issue, the reference yield for the new notes coming in at not less than 2.85% and the new notes being treated as part of the same issue as the notes issued for cash for U.S. federal income tax purposes or having a total principal amount of at least $250 million.

The exchange offer is only being made to noteholders who are qualified institutional buyers, as defined in Rule 144A under the Securities Act, or persons other than U.S. persons, as defined in Regulation S under the Securities Act.

The information agent is Global Bondholder Services Corp. (866 857-2200 or, for banks and brokerage firms, 212 430-3774).

CenterPoint is a Houston-based energy delivery company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.