El Paso Corporation (NYSE: EP) today announced the commencement of cash
tender offers to purchase the ten series of its outstanding senior notes
listed in the tables below. The specific terms and conditions of the
tender offers are described in the Offer to Purchase dated July 13,
2011. The tender offers will expire at 11:59 p.m., New York City time,
on August 9, 2011 (such date and time, as it may be extended, the
"Expiration Date").
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Early
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Principal
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Tender Offer
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Tender
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Total
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CUSIP
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Amount
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Consideration
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Payment
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Consideration
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Title of Notes
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Number
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Outstanding
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(1)
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(1)
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(1)(2)
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Any and All
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Notes:
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9.625% Senior
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Debentures
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due 2012
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190441AP0
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(3)
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$570,000
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$1,040.00
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$30.00
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$1,070.00
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9.625% Senior
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Notes due
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2012
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28336LAZ2
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$27,583,000
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$1,040.00
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$30.00
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$1,070.00
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8.250% Senior
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Notes due
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2016
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28336LBT5
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$67,867,000
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$1,110.00
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$30.00
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$1,140.00
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6.950% Senior
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Debentures
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due 2028
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190441AW5
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(3)
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$896,000
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$1,095.00
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$30.00
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$1,125.00
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6.950% Senior
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Notes due
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2028
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28336LBD0
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$173,534,000
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$1,095.00
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$30.00
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$1,125.00
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7.420% Senior
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Debentures
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due 2037
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190441AT2
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(3)
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$236,000
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$1,140.00
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$30.00
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$1,170.00
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7.420% Senior
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Notes due
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2037
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28336LBH1
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$160,218,000
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$1,140.00
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$30.00
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$1,170.00
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Principal
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Early
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Total Consideration
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CUSIP
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Amount
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Tender
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(Acceptable Bid
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Title of Notes
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Number
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Outstanding
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Payment(1)
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Price Range)(1)(2)
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Dutch Auction
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Notes:
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6.875% Senior
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Notes due 2014
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28336LBM0
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$375,000,000
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$30.00
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$1,115.00 - $1,145.00
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7.000% Senior
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Notes due 2017
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28336LBQ1
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$900,000,000
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$30.00
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$1,135.00 - $1,165.00
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7.250% Senior
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Notes due 2018
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28336LBR9
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$575,000,000
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$30.00
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$1,135.00 - $1,165.00
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(1)
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Per $1,000 principal amount of Notes tendered and accepted for
purchase.
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(2)
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Includes the Early Tender Payment.
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(3)
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Originally issued at The Coastal Corporation and were exchanged for
El Paso Corporation Notes in December 2005. Amounts outstanding for
these Debentures are small positions which were not exchanged in
that exchange offer and were assumed by the Company on December 31,
2005.
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Upon the terms and subject to the conditions described in the Offer to
Purchase, El Paso is offering to purchase for cash:
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Any and all of the seven series of notes identified as Any and All
Notes in the table above for the consideration indicated in the table;
and
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The three series of notes identified as Dutch Auction Notes in the
table above with the price determined pursuant to the Dutch Auction
process described below.
Dutch Auction Tender Offers
El Paso is offering to purchase the Dutch Auction Notes such that the
aggregate amount of the consideration (excluding Accrued Interest and
fees and expenses) paid for the Dutch Auction Notes tendered is equal to
$750,000,000 less the aggregate amount of the consideration (excluding
Accrued Interest and fees and expenses) paid for the Any and All Notes
tendered and accepted for purchase (the "Maximum Dutch Auction Tender
Offer Amount"). El Paso reserves the right to increase the Maximum Dutch
Auction Tender Offer Amount, without extending withdrawal rights,
subject to compliance with applicable law.
The Total Consideration payable to Holders who validly tender and do not
validly withdraw their Dutch Auction Notes on or prior to the Early
Tender Date will be determined based on a formula consisting of a "base
price" per $1,000 principal amount of Dutch Auction Notes, plus a
"clearing premium" to be determined pursuant to the modified "Dutch
Auction." Holders validly tendering their Dutch Auction Notes after the
Early Tender Date and on or prior to the Expiration Date will only be
eligible to receive the Tender Offer Consideration for their Dutch
Auction Notes, which is equal to the Total Consideration for such Dutch
Auction Notes less the Early Tender Payment.
The clearing premium will be determined by consideration of the "bid
price" specified by each Holder that tenders Dutch Auction Notes into
the applicable Dutch Auction Tender Offer, which represents the minimum
Total Consideration such Holder is willing to receive for those Dutch
Auction Notes. The bid price each Holder specifies with respect to a
particular series of Dutch Auction Notes must be within the following
ranges:
Series of Notes
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Base Price
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Maximum Bid Price
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6.875% Senior Notes due June 15, 2014
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$1,115.00
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$ 1,145.00
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7.000% Senior Notes due June 15, 2017
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$1,135.00
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$ 1,165.00
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7.250% Senior Notes due June 1, 2018
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$1,135.00
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$ 1,165.00
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With respect to each Dutch Auction Tender Offer, the "clearing premium"
will be determined by consideration of the "bid premiums" (equal to the
excess of each "bid price" over its respective Base Price) of all
validly tendered (and not withdrawn) Dutch Auction Notes in order of
lowest to highest bid premiums. The clearing premium will be:
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The lowest single premium such that for all tenders of Dutch Auction
Notes whose bid price results in a bid premium equal to or less than
this single lowest premium we will be able to spend the Maximum Dutch
Auction Tender Offer Amount; or
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In the event that the number of Dutch Auction Notes that are tendered
would result in El Paso spending less than the Maximum Dutch Auction
Tender Offer Amount, the highest Bid Premium with respect to any Dutch
Auction Notes validly tendered (and not withdrawn).
With respect to each Dutch Auction Tender Offer, if the aggregate amount
of Dutch Auction Notes validly tendered (and not withdrawn) at or above
the clearing premium would cause El Paso to spend more than the Maximum
Dutch Auction Tender Offer Amount, then, subject to the terms and
conditions of the Dutch Auction Tender Offers, El Paso will accept for
purchase, first, all Dutch Auction Notes validly tendered (and not
withdrawn) at a bid premium less than the applicable clearing premium,
and thereafter, Dutch Auction Notes validly tendered (and not withdrawn)
with a bid premium equal to the applicable clearing premium on a
prorated basis.
General
Holders of Notes that are validly tendered and not validly withdrawn on
or prior to 5:00 p.m., New York City time, on July 26, 2011 (such time,
as it may be extended, the "Early Tender Date") and that El Paso accepts
for purchase will receive the applicable total consideration as
specified in the table above (the "Total Consideration"), which includes
the applicable early tender payment as specified in the table above (the
"Early Tender Payment"). Holders of Notes that are validly tendered
after the Early Tender Date but on or prior to the Expiration Date and
that El Paso accepts for purchase will receive only the applicable
Tender Offer Consideration. The applicable Tender Offer Consideration is
equal to the applicable Total Consideration minus the applicable Early
Tender Payment.
Holders who tender Notes on or prior to 5:00 p.m., New York City time,
on July 26, 2011 (such date and time, as it may be extended, the
"Withdrawal Deadline") may withdraw such tendered Notes at any time on
or prior to the Withdrawal Deadline. Following the Withdrawal Deadline,
Holders who have tendered their Notes (whether before, on or after the
Withdrawal Deadline) may not withdraw such Notes, unless El Paso is
required to extend withdrawal rights under applicable law.
Payments for any Notes purchased by El Paso will include accrued and
unpaid interest from and including the last interest payment date up to,
but not including, the applicable settlement date.
El Paso may, at its option, accept for payment Any and All Notes validly
tendered and not validly withdrawn on or prior to the Early Tender Date
at any time after the Early Tender Date and prior to the Expiration Date
(an "Early Acceptance Date"). If El Paso elects to have an Early
Acceptance Date, the Early Acceptance Date may be as early as July 27,
2011, the first business day after the Early Tender Date. In such event,
El Paso expects to purchase the Any and All Notes tendered on or prior
to the Early Tender Date at a time promptly following early acceptance.
Payment of the applicable Tender Offer Consideration (and for Notes
validly tendered on or prior to the Early Tender Date, the applicable
Early Tender Payment) with respect to Notes that are validly tendered on
or prior to the Expiration Date and are accepted for purchase (and not
already purchased pursuant to early acceptance) will be made on the
final settlement date, which is expected to be on August 10, 2011, the
first business day following the Expiration Date.
The complete terms and conditions of each tender offer is set forth in
the Offer to Purchase and a Letter of Transmittal, along with any
amendments and supplements thereto, which Holders are urged to read
carefully before making any decision with respect to the tender offers.
Copies of the Offer to Purchase and the Letter of Transmittal may be
obtained from Global Bondholder Services Corporation, the depositary and
information agent for the tender offers, at (212) 430-3774 (banks and
brokers) or (866) 952-2200 (all others). Questions regarding the tender
offers also may be directed to the dealer managers for the Tender
Offers, Citigroup Global Markets Inc. at (800) 558-3745 (toll-free) or
(212) 723-6106 (collect) or Deutsche Bank Securities Inc. at (855)
287-1922 (toll-free) or (212) 250-7527 (collect).
This press release is neither an offer to purchase nor a solicitation of
an offer to sell any securities. El Paso is making the tender offers
only by, and pursuant to the terms of, the Offer to Purchase and a
Letter of Transmittal. The tender offers are not being made in any
jurisdiction in which the making or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such
jurisdiction. None of El Paso, the depositary and information agent, the
dealer managers or the trustee with respect to the Any and All Notes and
the Dutch Auction Notes, or any of El Paso's or their respective
affiliates, makes any recommendation as to whether Holders should tender
or refrain from tendering, all or any portion of their Notes in response
to the applicable tender offer.
El Paso Corporation provides natural gas and related energy products in
a safe, efficient, and dependable manner. The company owns North
America's largest interstate natural gas pipeline system, one of North
America's largest independent oil and natural gas producers and an
emerging midstream business.
Cautionary Statement Regarding Forward-Looking Statements
This release includes certain forward-looking statements and
projections. The company has made every reasonable effort to ensure that
the information and assumptions on which these statements and
projections are based are current, reasonable, and complete. Important
factors which could cause actual results to differ materially from those
in forward-looking statements include, among others, unfavorable market
conditions, and our ability to successfully complete the tender offers.
While the company makes these statements and projections in good faith,
neither the company nor its management can guarantee that anticipated
future results will be achieved. Reference must be made to those filings
for additional important factors that may affect actual results. The
company assumes no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking
statements made by the company, whether as a result of new information,
future events, or otherwise.