HOUSTON--(BUSINESS WIRE)--Jun. 5, 2009--
Exterran Holdings, Inc. (“Exterran” or the “Company”) (NYSE:EXH) today
announced the pricing of $325 million of 4.25% convertible senior
unsecured notes due June 15, 2014. The offering size was increased to
$325 million in gross proceeds based on market demand. In addition, the
Company has granted the underwriters the option to purchase up to an
additional $48.75 million of notes on the same terms and conditions to
cover over-allotments, if any.
The notes will pay interest semi-annually at a rate of 4.25% per annum
and will mature on June 15, 2014. Holders may convert their notes at
their option under certain circumstances and during certain periods at
an initial conversion rate of 43.1951 shares of the Company’s common
stock per $1,000 principal amount of notes (equivalent to an initial
conversion price of approximately $23.15 per share of common stock),
subject to adjustment in certain circumstances. The initial conversion
price represents a conversion premium of 24% over the last reported sale
price of the common stock of $18.67 per share. Upon conversion, Exterran
will deliver to such converting holders cash, shares of the Company’s
common stock, or a combination of cash and shares of the Company’s
common stock, at its election.
In connection with the offering of the notes, the Company entered into
convertible note hedge transactions with affiliates of J.P. Morgan
Securities Inc., Merrill Lynch & Co., Wachovia Securities and Credit
Suisse (the “Counterparties”). The convertible note hedge transactions
are expected to reduce the potential dilution to the Company’s common
stock upon conversion of the notes. The Company also entered into
warrant transactions with the Counterparties. However, the warrant
transactions could separately have a dilutive effect to the extent that
the market value per share of the Company’s common stock exceeds the
applicable strike price of the warrants when they are exercised. The
exercise price of the warrant transactions (approximately $32.67 per
share) represents a premium of 75% over the last reported sale price of
the Company's common stock on the New York Stock Exchange on June 4,
2009.
The Company expects to use a portion of the net proceeds from this
offering to pay the cost of the convertible note hedge transaction
(after such cost is partially offset by proceeds from the sale of the
warrants). The remainder of the net proceeds from the sale of the notes
will be used to pay down borrowings under the Company’s revolving credit
facility and its asset-backed securitization facility. If the
underwriters exercise their over-allotment option to purchase additional
notes, the Company will not sell additional warrants or enter into
additional convertible note hedge transactions.
In connection with establishing their initial hedge of the convertible
note hedge and warrant transactions, Exterran expects that the
Counterparties or their respective affiliates will enter into various
derivative transactions with respect to Exterran’s common stock
concurrently with, or shortly after, the pricing of the convertible
senior notes. This activity could increase (or reduce the size of any
decrease in) the price of Exterran’s common stock at that time. In
addition, the Counterparties or their affiliates may modify their hedge
positions by entering into or unwinding various derivative transactions
and/or purchasing or selling Exterran’s common stock in secondary market
transactions following the pricing of the convertible senior notes and
prior to maturity of the convertible senior notes (and are likely to do
so during any settlement period related to the conversion of the
convertible senior notes). This activity could also cause or avoid an
increase or a decrease in the market price of Exterran’s common stock or
the convertible senior notes and, to the extent the activity occurs
during any settlement period related to a conversion of convertible
senior notes, it could affect the number of shares and value of
consideration that noteholders will receive upon conversion of the notes.
The closing of the convertible senior notes offering is expected to
occur on June 10, 2009, subject to satisfaction of customary market and
other closing conditions.
J.P. Morgan Securities Inc., Merrill Lynch & Co., Wachovia Securities
and Credit Suisse are acting as joint book-running managers for the
offering.
The offering was made only by means of a prospectus, forming a part of
the Company’s shelf registration statement, related prospectus
supplement and other related documents. Before you invest, you should
read the prospectus supplement and accompanying prospectus and other
documents the Company has filed with the SEC for more complete
information about the Company and this offering. You may obtain these
documents for free by visiting IDEA on the SEC website at www.sec.gov.
Alternatively, you may obtain a copy of the prospectus supplement and
accompanying prospectus from (i) J.P. Morgan Securities Inc., National
Statement Processing, Prospectus Library, 4 Chase Metrotech Center, CS
Level, Brooklyn, NY 11245; (ii) Merrill Lynch & Co., 4 World Financial
Center, New York, NY 10080, Attn: Prospectus Department; (iii) Wachovia
Capital Markets, LLC, Attn: Equity Syndicate Dept., 375 Park Avenue, New
York, NY 10152; or (iv) Credit Suisse, Credit Suisse Securities (USA)
LLC, Prospectus Department, One Madison Avenue, New York, NY 10010.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy the notes or any other securities, nor
will there be any sale of notes or any other securities 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 any
such state or jurisdiction.
About Exterran Holdings
Exterran Holdings, Inc. is a global market leader in full service
natural gas compression and a premier provider of operations,
maintenance, service and equipment for oil and gas production,
processing and transportation applications. Exterran Holdings serves
customers across the energy spectrum—from producers to transporters to
processors to storage owners. Exterran is headquartered in Houston,
Texas, and has over 10,000 employees and operations in over 30
countries. Exterran Holdings indirectly owns a majority interest in
Exterran Partners, L.P., a publicly-traded master limited partnership.
For more information, visit www.exterran.com.
Forward-Looking Statements
All statements in this release (and oral statements made regarding the
subjects of this release) other than historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. You can identify many of these statements
by looking for words such as “believes,” “expects,” “intends,”
“projects,” “anticipates,” “estimates” or similar words or the negative
thereof. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties and factors, many of which are outside the control of the
Company, which could cause actual results to differ materially from such
statements. Forward-looking information includes, but is not limited to,
statements regarding the Company’s plans to complete the offering of its
convertible senior notes.
While the Company believes that the assumptions concerning future events
are reasonable, it cautions that there are inherent difficulties in
predicting certain important factors that could impact the future
performance or results of its business. Among the factors that could
cause results to differ materially from those indicated by such
forward-looking statements are: market conditions; local, regional,
national and international economic conditions and the impact they may
have on the Company and its customers; changes in tax laws that impact
master limited partnerships; conditions in the oil and gas industry,
including a sustained decrease in the level of supply or demand for oil
and natural gas and the impact on the price of oil and natural gas; the
Company’s ability to timely and cost-effectively obtain components
necessary to conduct its business; changes in political or economic
conditions in key operating markets, including international markets;
and changes in safety and environmental regulations pertaining to the
production and transportation of oil and natural gas.
These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
the preliminary prospectus supplement, Exterran Holdings’ Annual Report
on Form 10-K for the year ended December 31, 2008, Quarterly Report on
Form 10-Q for the quarter ended March 31, 2009 and those set forth from
time to time in the Company’s filings with the Securities and Exchange
Commission, which are currently available at www.exterran.com.
Except as required by law, the Company expressly disclaims any intention
or obligation to revise or update any forward-looking statements whether
as a result of new information, future events or otherwise.
Source: Exterran Holdings, Inc.
Exterran
Investors: David Oatman, 281-836-7035
Media:
Susan Nelson, 281-836-7297