El Paso Corporation (EP) announced a cash tender offer to redeem its seven series of outstanding senior notes. The cash tender offer expires on April 13, 2011. The coupon rate of the outstanding notes ranges from 7.75% to 12.00% and the maturity dates vary from 2012 to 2032.
The company has fixed an early tender date of March 29, 2011. The notes tendered on the scheduled date will receive $30 each per $1,000 principal amount of notes tendered and accepted for purchase.
In October 2010, the company swapped its outstanding 12.00% senior notes due in 2013 with 6.50% notes due on 2020. The switch allowed the company to lengthen the maturity of its indebted senior notes and lower the coupon rate.
The planned redemption of several series of notes will further consolidate the balance sheet of El Paso Corp. The long-term debt of the company at the end of 2010 was $13.5 billion, while cash and cash equivalents at the end of the year were $347 million.
El Paso Corporation’s operating earnings per share in fourth quarter and fiscal 2010 failed to surpass the Zacks Consensus Estimates. The company expects earnings per share in 2011 to be in the range of 90 cents to $1.05.
The Zacks Consensus Estimates for first-quarter 2011, fiscal year 2011 and fiscal year 2012 are, respectively, 28 cents per share, $1.02 per share and $1.20 per share.
El Paso Corporation currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain a Neutral rating on the stock. On a competitive landscape, the net margin of the company betters its peer Williams Companies Inc. (WMB) in the trailing twelve months.
Based in Houston, Texas, El Paso Corporation involves in the natural gas transmission and in the exploration and production sectors of the energy industry. The company primarily operates in United States and has some exposure in Brazil and Egypt.
EL PASO CORP (EP): Free Stock Analysis Report
WILLIAMS COS (WMB): Free Stock Analysis Report
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