Petro Stopping increases payment in tender, extends deadline

New York, Jan. 7 - Petro Stopping Holdings LP (Caa3/CCC+) and Petro Holdings Financial Corp. announced changes to their tender offer for their $113.37 million principal amount at maturity of senior discount notes due 2008, increasing the payment that noteholders will receive.

The companies also extended the deadline.

They said they anticipate their largest bondholder, with 55% of the outstanding principal amount of the notes, will tender all those notes including tendering 42% of the existing notes into the note option.

Petro Stopping is continuing to offer two options to holders, either an all-cash payment or a note option.

For the cash option, Petro Stopping is now offering $790 in cash for each $1,000 principal amount at maturity or $919.09 accreted value as of Dec. 31 of the existing notes. That payment is up from $670 in cash per $1,000 principal amount previously.

Under the note option, Petro Stopping is offering $1,105.96 in principal amount at maturity or $919.09 initial accreted value at Dec. 31 of new senior third secured notes due 2014 for each $1,000 principal amount at maturity or $919.09 accreted value as of Dec. 31 of the existing notes. The new notes will accrete at 3.5% per year and pay cash interest at 5% per year up to April 30, 2009. After that they will pay cash interest at 11%. They will be callable at 100% of accreted value until April 30, 2009 and at par after that. The amount of new notes was increased from $1,001.31 principal amount at maturity or $833.70 accreted value previously.

Petro Stopping said it is continuing to solicit consents from holders of the existing notes to certain proposed amendments to the note indenture that would eliminate substantially all of the covenants and events of default.

Petro Warrant Holdings Corp. continues to solicit consents from holders of the warrants for its common stock to certain proposed amendments to the warrant agreement that would extend the mandatory purchase date of the warrants by Petro Warrant Holdings to Oct. 1, 2009 from Aug. 1, 2004.

Petro Stopping, an El Paso, Texas-based travel plaza operator, maintains its intention to refinance substantially all its existing debt in order to extend debt maturities, to increase financial flexibility and to take advantage of current conditions in the debt markets.

The expiration date for the offers was extended to 5 p.m. ET Jan. 23 from 5 p.m. ET Jan. 7.

As of the old expiration date, holders had tendered $939,000 principal amount at maturity of the old notes and Petro Warrant Holdings had received consents from holders of 53.1% of its warrants.

Any consents provided and any tenders made after Jan. 7 may not be withdrawn. Holders who have already tendered have until the expiration date to select the cash or new note option.

Petro Stopping previously amended the tender offer on Dec. 9.

The company was originally offering $242.57 in cash and $1030.30 in principal amount at maturity of new senior second secured discount notes due 2014 for each $1,000 principal amount at maturity of the existing notes. The new notes would have accrued cash interest at 14% beginning Oct. 1, 2009.

The information agent is Global Bondholders Services (212 430-3774 or 866 470-4200).

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