CenterPoint Energy exchanges $397.24 million of 7.875% notes in offer

By Angela McDaniels

Tacoma, Wash., Feb. 7 - CenterPoint Energy, Inc. subsidiary CenterPoint Energy Resources Corp. received tenders for $397,236,000 principal amount of its $762 million 7.875% senior notes due 2013 in an exchange offer that expired at midnight ET on Feb. 2, according to an 8-K filing with the Securities and Exchange Commission.

All of the notes exchanged in the offer were tendered by 5 p.m. ET on Jan. 18, which was the early participation date.

As previously reported, the notes were exchanged on Jan. 20. Holders received 4.5% senior notes due 2021 and cash.

The total exchange price for each $1,000 principal amount of notes tendered by the early participation date was $1,146.25. This consists of $286.56 in cash and $836.62 principal amount of new notes issued at 99.545.

The company issued $342,998,000 of the new notes in the exchange.

The new notes form a single series with the $250 million of notes that CenterPoint issued for cash on Jan. 11. They have a make-whole call at Treasuries plus 20 basis points.

Each holder whose 7.875% notes were accepted for exchange received a cash payment representing interest that had accrued up to but excluding the settlement date, reduced by the interest accrued on the new 4.5% notes from Jan. 11 up to but excluding the settlement date.

If any holders had tendered after the early participation date, they would have received the same amount of notes, and the cash amount would have been $256.56 per $1,000 principal amount of notes.

The total exchange price equals 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 cash amount is equal to 25% of the total exchange price, and the principal amount of new notes is equal to 75% of the exchange ratio multiplied by $1,000.

The exchange ratio is the ratio 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 exchange offer began Jan. 5 and was only 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 was Global Bondholder Services Corp. (866 857-2200 or, for banks and brokerage firms, 212 430-3774).

CenterPoint is a Houston-based energy delivery company.

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