KANSAS CITY, Mo., May 26, 2006 (PRIMEZONE) -- Aquila, Inc. (NYSE:ILA) today announced that it has increased to $250 million the aggregate principal amount (the "Maximum Tender Amount") that it could be obligated to accept for payment in its pending cash tender offer for certain of its outstanding senior notes (the "Notes"). In addition, the company set the pricing for its outstanding 6.700% Notes due October 15, 2006 (the "2006 Notes") and its 8.200% Notes due January 15, 2007 (the "2007 Notes"). As of 5:00 p.m., New York City time on May 25, 2006 (the "Early Tender Time"), the company had received tenders from holders of approximately $482 million in aggregate principal amount of Notes.
The total consideration for the 2006 Notes and the 2007 Notes was determined as of 2:00 p.m., New York City time, on May 25, 2006, by reference to a fixed spread of 50 basis points over the yield on a reference U.S. Treasury Note. For the 2006 Notes, the reference security was the 6.500% U.S. Treasury Note due October 15, 2006. For the 2007 Notes, the reference security was the 3.125% U.S. Treasury Note due January 31, 2007. The total consideration payable for the other Notes in the tender offer was previously fixed and is set forth in the Offer to Purchase dated May 12, 2006.
The total consideration to be paid for each $1,000 principal amount of the 2006 Notes (CUSIP Number 918005-AN-9) validly tendered and not withdrawn is $1,003.77, which includes an early tender payment of $20 per $1,000 principal amount of 2006 Notes (the "Early Tender Premium"). The Early Tender Premium is payable only to holders of the 2006 Notes who tendered and validly delivered their 2006 Notes on or prior to the Early Tender Time, and only if such Notes are accepted for purchase by the company. Holders who tender their 2006 Notes after the Early Tender Time and on or prior to 12:00 Midnight, New York City time on June 9, 2006, unless extended or earlier terminated by the company (the "Expiration Time") will be entitled to receive $983.77 per $1,000 principal amount of the 2006 Notes, if such Notes are accepted for purchase by the company.
The total consideration to be paid for each $1,000 principal amount of the 2007 Notes (CUSIP Number 918005-AF-6) validly tendered and not withdrawn is $1,015.12, which includes an Early Tender Premium of $20 per $1,000 principal amount of 2007 Notes. The Early Tender Premium is payable only to holders of the 2007 Notes who tendered and validly delivered their 2007 Notes on or prior to the Early Tender Time, and only if such Notes are accepted for purchase by the company. Holders who tender their 2007 Notes after the Early Tender Time and on or prior to the Expiration Time will be entitled to receive $995.12 per $1,000 principal amount of the 2007 Notes, if such Notes are accepted for purchase by the company.
The table below shows the series of Notes subject to the tender offer and the principal amount of Notes tendered to date:
Amount Tendered
CUSIP Principal Amount as of 5:00 pm on
Title of Security Number Outstanding May 25, 2006
----------------- ------ ----------- ------------
6.700% Notes
due 10/15/2006 918005-AN-9 $85,900,000 $84,490,000
8.200% Notes
due 01/15/2007 918005-AF-6 $36,905,000 $22,199,000
7.625% Notes
due 11/15/2009 918005-AW-9 $199,000,000 $130,501,000
9.950% Notes
due 02/01/2001 918005-AY-5 $250,000,000 $115,281,000
7.750% Notes
due 06/15/2011 91800K-AB-2 $197,000,000 $129,882,000
The tender offer is conditioned on the satisfaction of certain conditions described in the Offer to Purchase. 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. The company expects to accept certain of the Notes for purchase promptly after the Expiration Time and expects that it will pay the purchase price for the Notes on the business day following the date the Notes are accepted. Holders whose Notes are accepted 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.
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. Such an offer is made only by the 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 concerning the offer should contact the Dealer Manager at (212) 723-6106 or toll-free at (800) 558-3745, or the Information Agent at (212) 431-3774 or 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