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PNM Resources Announces Cash Tender Offer for Senior Notes Due 2015

^{Published on 2011-10-24 11:46:53 - Market Wire}
 

ALBUQUERQUE, N.M.--([ BUSINESS WIRE ])--PNM Resources (NYSE: PNM) today announced it has commenced a cash tender offer to purchase up to $50.0 million aggregate principal amount of its outstanding 9.25% Senior Notes, Series A, due 2015.

The planned debt purchase is part of PNM Resourcesa plan to use the net proceeds from the First Choice Power sale to recapitalize its business through debt and equity repurchases. The planned debt purchase is contingent on the completion of the First Choice Power sale to Direct Energy, which is anticipated to close on Nov. 1, 2011.

As of Oct. 21, 2011, approximately $192.6million aggregate principal amount of the notes were outstanding. The tender offer is being made pursuant to an offer to purchase dated as of today, which sets forth a more comprehensive description of the terms of the offer.

The tender offer is scheduled to expire at the end of the day (midnight, Eastern) on Nov. 21, 2011, unless extended or terminated earlier. Holders of the notes must tender and not withdraw their notes at or before the early tender date, which is 5 p.m., Eastern time, on Nov. 4, 2011, unless extended, to receive the total consideration.

The total consideration payable for each $1,000 principal amount of the notes validly tendered at or before the early tender date and accepted for payment is equal to $1,170. Holders who tender their notes after the early tender date will, if such notes are purchased by PNM Resources, receive the tender offer consideration, which is the total consideration minus an early tender payment of $30 per $1,000 principal amount of the notes, which will be payable promptly following the expiration date. In addition to the total consideration or tender offer consideration, as applicable, holders of notes accepted for payment will receive accrued and unpaid interest from the last interest payment date for the notes to, but not including, the settlement date.

If the aggregate principal amount of the notes validly tendered exceeds the tender cap, the aggregate principal amount of notes purchased will be prorated based on the aggregate principal amount of notes tendered, such that the aggregate principal amount of notes accepted for purchase will not exceed the tender cap. PNM Resources reserves the right, in its sole discretion to the extent permitted by law, to waive, increase or decrease the tender cap without extending the withdrawal date (as defined below).

Except as required by applicable law, the notes tendered may be withdrawn only at or before the withdrawal date, which is 5 p.m., Eastern time, on Nov. 4, 2011, and the notes tendered after the withdrawal date and before the expiration of the tender offer may not be withdrawn. It is anticipated that the settlement date for the notes validly tendered on or before the expiration date and accepted for purchase by PNM Resources will be Nov. 22, 2011.

PNM Resources has retained Citigroup Global Markets Inc. to serve as dealer manager for the tender offer. PNM Resources has retained Global Bondholder Services Corporation to serve as the depositary and as the information agent for the tender offer. Requests for documents may be directed to Global Bondholder Services Corporation by phone at (866) 470-3700 or (212) 430-3774 or in writing at 65 Broadway, Suite 404, New York, NY 10006. Questions regarding the tender offer may be directed to Citigroup Global Markets Inc. at (800) 558-3745.

The tender offer is subject to the satisfaction of certain conditions, including the closing of the pending sale by PNM Resources of one of its subsidiaries, First Choice Power, to Direct LP, Inc. If any condition is not satisfied, PNM Resources 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 terminate the tender offer. The tender offer is not conditioned on the tender of a minimum principal amount of the notes. PNM Resources is not soliciting consents from holders of the notes in connection with the tender offer.

This news release is neither an offer to purchase nor a solicitation of an offer to sell the notes or any other securities. The tender offer is made only by and pursuant to the terms of the offer to purchase and the related letter of transmittal and the information in this news release is qualified by reference to the offer to purchase and the related letter of transmittal. PNM Resources, the dealer manager or the depositary and information agent makes no recommendations as to whether holders should tender their notes pursuant to the tender offer. Holders must make their own decisions as to whether to tender notes, and, if so, the principal amount of notes to tender.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2010 consolidated operating revenues of $1.7 billion. Through its utility subsidiaries, PNM Resources has approximately 2,530 megawatts of generation capacity and serves electricity to more than 700,000 homes and businesses in New Mexico and Texas. For more information, visit the company's Web site at [ www.PNMResources.com ].

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

Statements made in this news release that relate to future events or PNM Resourcesa, Public Service Company of New Mexicoas (aPNMa), or Texas-New Mexico Power Companyas (aTNMPa) (collectively, the aCompanya) expectations, projections, estimates, intentions, goals, targets, and strategies, including PNM Resourcesa planned conduct and consummation of the tender offer and sale of First Choice Power, are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and PNM Resources, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNM Resources, PNM, and TNMP caution readers not to place undue reliance on these statements. PNM Resourcesa, PNMas, and TNMPas business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. These factors include: the risk that PNM Resourcesa agreed upon sale of First Choice Power to Direct Energy does not close as planned; conditions affecting the Companyas ability to access the financial markets and the Companyas ability to negotiate new credit facilities for those expiring in 2012, including disruptions in the credit markets and actions by ratings agencies affecting the Companyas credit ratings; the potential unavailability of cash from PNM Resourcesa subsidiaries due to regulatory, statutory, or contractual restrictions; the impacts of decreases in the values of marketable equity securities on the trust funds maintained to provide nuclear decommissioning funding and pension and other postretirement benefits, including the levels of funding and expense; the impact of economic conditions on the electricity usage of the Companyas customers; state and federal regulatory, legislative and judicial decisions and actions, including the outcomes of our pending cases and appeals of prior regulatory proceedings; the ability of PNM to successfully defend the utilization of a future test year in its electric rate filings with the New Mexico Public Regulation Commission (aNMPRCa), including PNMas ability to withstand challenges by regulators and intervenors; the ability of the Company to successfully forecast and manage its operating and capital expenditures, particularly in the context of a future test year rate case with respect to PNM; the ability of PNM and TNMP to recover their costs and earn their allowed returns in their regulated jurisdictions; the ability of PNM to meet the renewable energy requirements established by the NMPRC, including the resource diversity requirement, within the specified cost parameters; the risk that replacement power costs incurred by PNM related to not meeting the specified capacity factor for its generating units under its emergency fuel and purchased power adjustment clause or for other reasons will not be approved by the NMPRC; state and federal regulation or legislation relating to climate change, reduction of greenhouse gas emissions, coal combustion byproducts, nitrogen oxide and other power plant emissions, including the risk that the Company may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements, including requirements to address regional haze regulations and related Best Available Retrofit Technology requirements and concerns about global climate change, and the resultant impacts on the operations and economic viability of generating plants in which PNM have interests; the performance of generating units, including the Palo Verde Nuclear Generating Station (aPVNGSa), the San Juan Generating Station and the Four Corners Power Plant, transmission systems and distribution systems, which could be negatively affected by major equipment failures, major weather disruptions, disruptions in fuel supply and other significant operational issues; financial and operational risks at PVNGS relating to any increased regulatory review and actions in response to the events at the Fukushima Daiichi Nuclear Power Plant in Japan; the risks associated with completion of generation, transmission, distribution and other projects, including construction delays and unanticipated cost overruns; uncertainty regarding the requirements and related costs of decommissioning power plants owned or partially owned by PNM and coal mines supplying certain PNM power plants, as well as the ability to recover decommissioning costs from customers; uncertainty surrounding the status of PNMas participation in jointly owned generation projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2016 and potential changes in the objectives of the participants in the projects; the risk that recently enacted reliability standards regarding available transmission capacity may reduce certain PNM transmission rights used to transmit its generation resources and provide access to transmission customers resulting in a need to purchase additional transmission capacity, reduce sales of transmission capacity, or operate generation less economically; changes in Electric Reliability Council of Texas (aERCOTa) protocols; changes in the cost of power acquired by First Choice Power and changes in the retail price of power in ERCOT; the ability of First Choice Power to attract and retain customers; collections experience; fluctuations in interest rates; weather; water supply; changes in fuel costs; availability of fuel supplies; the effectiveness of risk management and commodity risk transactions; seasonality and other changes in supply and demand in the market for electric power; the impact of mandatory energy efficiency measures on customer energy usage; variability of wholesale power prices and natural gas prices; volatility and liquidity in the wholesale power markets and the natural gas markets; uncertainty regarding the ongoing validity of government programs for emission allowances; changes in the competitive environment in the electric industry; the outcome of legal proceedings; the extent of insurance coverage available for claims made in litigation; changes in applicable accounting principles; and the performance of state, regional, and national economies.