For a second time, the Clay Gas Utility District of Clay County, Tenn., has extended a tender offer to buy back its bonds for 10 cents on the dollar.
The contingent tender offer was initially supposed to end on Feb. 8 but it was extended until Feb. 17.
In the latest offer, the gas district said it would take tendered bonds until March 9. No reason for the extension was given.
District officials plan to fund the purchase of tendered bonds with $200,000 in cash and $114,000 of proceeds from a tax-exempt, subordinate-lien refunding bond to be issued on or before the settlement date.
The rural utility district sold $3.25 million of unrated, uninsured bonds in 1998 to build a natural gas distribution system. Only $110,000 of principal was ever paid.
Currently, $3.14 million is outstanding in maturities between 2001 and 2017. Some of the bonds traded late last year at near worthless prices. The district has not paid any principal or interest since June 1, 2001.
The original bonds were sold by a division of Morgan Keegan & Co., which is the dealer for the tender offer. The firm holds about 25% of the outstanding principal, which it plans to sell in the tender offer.
The gas district was beset by financial problems from the beginning, including a project manager who went to prison for embezzlement.