WHIPPANY, N.J., March 31 /PRNewswire-FirstCall/ -- Suburban Propane
Partners, L.P. (NYSE: SPH) (the "Partnership"), a marketer of propane gas,
fuel oil and related products and services nationwide, today announced that it
closed its previously announced refinancing (the "Refinancing") of
$297.5 million outstanding aggregate principal amount of 7.54% senior notes
due 2011 and $42.5 million outstanding aggregate principal amount of 7.37%
senior notes due 2012 (the "Redeemed Notes") issued by Suburban Propane, L.P.
(the "Operating Partnership"). The Partnership received proceeds of
approximately $248 million, net of a discount on sale, from the issuance of
$250 million aggregate principal amount of 6.875% senior notes due 2013 (the
"Senior Notes") which were issued as additional notes under the Partnership's
existing indenture. In addition, the Operating Partnership borrowed
$125 million under the previously announced amendment to its existing bank
credit facility (the "Amendment").
The total proceeds of approximately $371 million, net of commissions and
bank fees, together with cash of approximately $7.3 million, were used to
prepay the Redeemed Notes, including a prepayment premium of approximately
$31.9 million and interest accrued on the Redeemed Notes of approximately
$6.4 million from the last interest payment date through the date of
redemption.
The Redeemed Notes required an annual principal repayment of $42.5 million
through 2012. The Refinancing replaces the annual cash requirement for
principal amortization with the $125 million five-year term loan facility
provided under the Amendment and the $250 million of Senior Notes,
significantly extending the Partnership's debt maturities and eliminating
refinancing risk associated with the amortization of the Redeemed Notes. The
Refinancing is expected to reduce the Partnership's annual interest expense
for at least the next five years. The Partnership will record a one-time
charge of approximately $36.1 million during the third quarter of fiscal 2005
as a result of the Refinancing to reflect the loss on debt extinguishment
associated with the prepayment premium and the write-off of $4.2 million of
unamortized bond issuance costs associated with the Redeemed Notes.
In announcing the closing of the Refinancing, Vice President and Chief
Financial Officer Robert M. Plante said, "The recent historically low interest
rate environment has provided us a unique opportunity to further improve our
leverage profile by significantly extending our debt maturities, while at the
same time reducing our annual interest expense and eliminating certain
restrictive covenants. We are very pleased with the results of this
refinancing and the support received from our lenders and senior note
investors."
The Senior Notes issued in this offering have not been registered under
the Securities Act of 1933 or applicable state securities laws, and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act and
applicable state laws. This press release shall not constitute an offer to
sell or a solicitation of an offer to buy the Senior Notes nor shall there be
any sale of Senior Notes in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such state or jurisdiction.
Suburban Propane Partners, L.P. is a publicly traded Master Limited
Partnership listed on the New York Stock Exchange. Headquartered in Whippany,
New Jersey, Suburban has been continuously engaged in the retail propane
business since 1928. The Partnership serves the energy needs of approximately
1,000,000 residential, commercial, industrial and agricultural customers
through more than 370 customer service centers in 30 states.
SOURCE Suburban Propane Partners, L.P.
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Related links:
http://suburbanpropane.com
Company News On-Call:
http://www.prnewswire.com/comp/112074.html
CONTACT:
Robert M. Plante, Vice President & Chief
Financial Officer of Suburban Propane Partners, L.P.,
+1-973-503-9252
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