Hanover Compressor Company Announces Redemption of $383 Million of Senior Secured Notes Issued by Hanover Equipment Trust 2001A
August 17 2007 - 4:36PM
Business Wire
Hanover Compressor Company (�Hanover�) (NYSE:HC) today announced
that Hanover Equipment Trust 2001A, a special purpose Delaware
business trust (�HET 2001A�), will redeem all $133 million of its
outstanding 8.5% Senior Secured Notes due 2008 (the �8.5% Notes�),
and Hanover Equipment Trust 2001B, a special purpose Delaware
business trust (�HET 2001B�), will redeem all $250 million of its
outstanding 8.75% Senior Secured Notes due 2011 (the �8.75% Notes,�
and, together with the 8.5% Notes, the �Notes�). The indenture
governing the 8.5% Notes permits the redemption of all of the 8.5%
Notes at a redemption price of 100% plus accrued and unpaid
interest to the date fixed for redemption. The indenture governing
the 8.75% Notes permits the redemption of all of the 8.75% Notes at
a redemption price of 102.917% plus accrued and unpaid interest to
the date fixed for redemption. The redemption date of both series
of Notes is September 17, 2007. To commence the redemption process,
Hanover Compression Limited Partnership, an indirect wholly owned
subsidiary of Hanover (�HCLP�), exercised its option to purchase
from HET 2001A the gas compression equipment currently under lease
to HCLP from HET 2001A, and HCLP exercised its option to purchase
from HET 2001B the gas compression equipment currently under lease
from HET 2001B. HCLP expects to pay HET 2001A approximately $137.7
million and to pay HET 2001B approximately $266.3 million for the
equipment on the date the Notes are redeemed. The trusts will then
use the proceeds from the equipment sale to fund the redemption of
the Notes and the related trust equity certificates. U.S. Bank
Trust National Association is the trustee and redemption agent for
the Notes. Formal notice of the redemption setting forth the
redemption procedures was sent to noteholders on August 17, 2007.
The redemption of the Notes is part of the refinancing plan of
Hanover and Universal Compression Holdings, Inc. (�Universal�)
being implemented in anticipation of the closing of their pending
merger, which is currently expected to occur on or about August 20,
2007, if the conditions to the closing have been satisfied as of
that date. As part of the refinancing plan, Exterran Holdings,
Inc., which will be the publicly traded holding company following
the completion of the merger, has engaged Wachovia Capital Markets,
LLC and J. P. Morgan Securities Inc. to arrange and syndicate a
senior secured credit facility, consisting of a revolving credit
facility and a term loan, and has engaged Wachovia to provide a new
asset-backed securitization facility to Exterran. The primary
purpose of these new facilities will be to fund the redemption or
repurchase of all of Hanover�s and Universal�s outstanding debt
other than Hanover�s convertible debt securities and the credit
facility of Universal's publicly traded subsidiary, Universal
Compression Partners, L.P. The new facilities will replace
Hanover�s and Universal�s existing bank lines and Universal's
existing asset-backed securitization facility. The closing of the
new facilities is subject to, among other things, the receipt of
sufficient commitments from participating lenders and the execution
of mutually satisfactory documentation. About Hanover Compressor
Company Hanover Compressor Company is a global market leader in
full service natural gas compression and a leading provider of
service, fabrication and equipment for oil and natural gas
production, processing and transportation applications. Hanover
sells and rents this equipment and provides complete operation and
maintenance services, including run-time guarantees for both
customer-owned equipment and its fleet of rental equipment.
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. 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 Hanover�s
control, which could cause actual results to differ materially from
such statements. Forward-looking information includes, but is not
limited to, statements regarding the ability of the parties to
complete the redemptions and equipment purchases, the timing of the
redemptions and equipment purchases, the use of proceeds from the
equipment purchases, the ability of Hanover and Universal to
complete their proposed merger, the expected timing of the closing
of the merger, Hanover�s and Universal�s plans for and the timing
of the refinancing of certain of their outstanding debt obligations
and Exterran�s plans for and the timing of its entering into a new
credit facility and asset-backed securitization facility. While
Hanover 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 or Exterran�s business. Among the
factors that could cause results to differ materially from those
indicated by such forward-looking statements are the satisfaction
of various conditions to the closing of the merger contemplated by
the merger agreement, the possible inability to obtain sufficient
commitments to the credit facility from participating lenders or
the inability to reach agreement with participating lenders on
mutually satisfactory documentation for the credit facility or the
securitization facility. These forward-looking statements are also
affected by the risk factors, forward-looking statements and
challenges and uncertainties described in Hanover�s Annual Report
on Form 10-K for the year ended December 31, 2006, as amended by
Amendment No. 1 thereto, and those set forth from time to time in
Hanover�s filings with the Securities and Exchange Commission
(�SEC�), which are available through www.hanover-co.com. Except as
required by law, Hanover 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.
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