El Paso to bring $1 billion term loan via Salomon Smith Barney and CSFB

By Sara Rosenberg

New York, Feb. 25 - El Paso Corp. was expected to launch a $1 billion term loan either late Tuesday or on Wednesday, according to market sources. Salomon Smith Barney and Credit Suisse First Boston are the lead banks on the deal.

Price talk on the term loan is Libor plus 650 basis points, according to a fund manager, who added that the deal's success "all boils down to the collateral package."

Amortization is $250 million in June 2004, $250 million in September 2004 and the $500 million balance in March 2005.

Security is a portion of the production properties that currently support the Trinity River financing.

Proceeds will be used to retire the projected $825-million net balance of the Trinity River financing in March.

"Retirement of the existing Trinity River financing will simplify El Paso's balance sheet and provide El Paso with significant additional flexibility and liquidity," a news release said.

El Paso is a Houston provider of natural gas services.

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