KANSAS CITY, Mo., May 12, 2006 (PRIMEZONE) -- Aquila, Inc. (NYSE:ILA) today announced that it has commenced a cash tender offer for certain of the outstanding senior notes listed in the table below (the "Notes"). The company is offering to purchase up to $150 million aggregate principal amount (the "Maximum Tender Amount") of its Notes, in accordance with the terms and conditions described in its Offer to Purchase dated May 12, 2006. The tender offer will expire at midnight, New York City time, on June 9, 2006, unless extended or earlier terminated (the "Expiration Time").
"We have said that one of our goals is to strengthen the company's balance sheet," said Rick Dobson, Aquila's Chief Financial Officer. "This transaction efficiently uses the proceeds raised from recent asset sales to reduce our debt and interest expense and further enhance the company's credit profile. It is another important step forward in completing our repositioning plan."
The total consideration payable for certain Notes will be based on the yield to maturity of a specified U.S. Treasury reference security, plus a fixed spread, and the total consideration for the remainder of the Notes is a fixed price. All Notes tendered will be accepted for repurchase in a specified priority. The table below shows, among other things, the series of Notes subject to the tender offer, the acceptance priority of each series, the fixed price for certain series of Notes, the applicable U.S. treasury reference security for other series of Notes, and the applicable fixed spread:
Fixed
Spread
Fixed (basis
Price points)
or Accept- or
Principal Early Fixed ance Fixed
Amount Tender Spread Reference Priority Price Per
Notes Outstanding Premium(1) Offer Security Level $1,000(2)
----- ----------- --------- ------ -------- ----- --------
Aquila $85,900,000 $20.00 Spread 6.500% 1 +50
6.700% U.S.
Senior Treasury
Notes Note due
due October
October 15, 2006
15, 2006
Aquila $36,905,000 $20.00 Spread 3.125% 2 +50
8.200% U.S.
Senior Treasury
Notes Note due
due January
January 31, 2007
15, 2007
Aquila $199,000,000 $20.00 Price N/A 3 $1,046.25
7.625%
Senior
Notes
due
November
15, 2009
Aquila $250,000,000 $20.00 Price N/A 4 $1,135.00
9.950%
Senior
Notes
due
February
1, 2011
Aquila $197,000,000 $20.00 Price N/A 5 $1,060.00
7.750%
Senior
Notes
due
June 15,
2011
---------
1. Per $1,000 principal amount of Notes that are accepted
for purchase.
2. Aquila expects that the price determination date will be
2:00 p.m., New York City time, on May 25, 2006 with respect
to the Notes having a total consideration based on a
fixed spread.
Holders tendering their Notes on or prior to 5:00 p.m., New York City time, on May 25, 2006, unless extended or earlier terminated (the "Early Tender Time"), will receive the total consideration, which includes an early tender premium of $20.00 per $1,000 principal amount of Notes purchased. Holders that tender their Notes after the Early Tender Time but prior to the Expiration Time will receive the total consideration less the early tender premium. In addition, in all cases, holders will receive accrued interest from the last interest payment date for such series of Notes to, but not including, the date the Notes are purchased.
Aquila may increase the Maximum Tender Amount for the Notes (in which case, the term "Maximum Tender Amount" will mean such amount as so increased) subject to applicable law, depending on the principal amount of Notes validly tendered and not withdrawn. If the aggregate principal amount of Notes of all series validly tendered and not withdrawn at the Expiration Time exceeds the Maximum Tender Amount, the Company will (subject to the terms and conditions of the offer) accept Notes based on the established acceptance priority and will pro-rate the Notes purchased in a single series as set forth in the Offer to Purchase. Except as set forth in Aquila's Offer to Purchase or as required by applicable law, Notes tendered prior to 5 p.m., New York City time, on May 25, 2006 (the "Withdrawal Deadline") may only be withdrawn in writing before the Withdrawal Deadline, and Notes tendered after the Withdrawal Deadline but before the Expiration Time may not be withdrawn.
The tender offer is conditioned on the satisfaction of certain conditions. If any of the conditions are not satisfied, Aquila is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered Notes, in each event, subject to applicable laws, and may even terminate the tender offer.
Citigroup Corporate and Investment Banking is the Dealer Manager for the tender offer. Global Bondholder Services Corporation is the Information Agent and Depository. This press release is neither an offer to purchase nor a solicitation of an offer to sell the Notes. The offer is made only by an Offer to Purchase dated May 12, 2006, and the information in this news release is qualified by reference to the Offer to Purchase. Persons with questions regarding the offer should contact the Dealer Manager at (212) 723-6106 or toll-free at (800) 558-3745, or the Information Agent, toll-free at (866) 294-2200.
Based in Kansas City, Missouri, Aquila employees operate electric power generation and electric and natural gas transmission and distribution utilities serving 1.2 million customers in communities in Colorado, Iowa, Kansas, Minnesota, Missouri and Nebraska. At March 31, 2006, Aquila had total assets of $4.2 billion. More information is available at www.aquila.com.
The Aquila, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=1753