Tenneco plans $225 million debt sale as soon as today

Tenneco Inc., a maker of catalytic converters, shock absorbers and bushings, plans to sell $225 million of eight-year senior notes as soon as today, according to a person familiar with the transaction.

The notes, which will be noncallable for four years, may yield 7.75 percent to 7.875 percent, said the person, who declined to be identified because terms aren't set. Proceeds will be used to help repurchase its 10.25 percent senior secured notes due in 2013, Lake Forest-based Tenneco said today in a statement distributed by Business Wire that didn't include the sale's timing.

The company will pay 101.708 percent of the principal amount, plus interest, for the outstanding debt, according to the statement. Tenneco sold the notes in 2003 and about $245 million is outstanding, according to data compiled by Bloomberg.

The debt traded at 102.375 cents on the dollar on July 7, 116 basis points more than similar-maturity Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. A basis point is 0.01 percentage point.

Tenneco last marketed bonds in June 2008, issuing $250 million of 8.125 percent notes due in 2015, Bloomberg data show. The notes were rated B2 by Moody's Investors Service and an equivalent B by Standard & Poor's, the data show.