Exterran Completes Debt Refinancing and Initiates Stock Repurchase Program

Exterran Holdings, Inc. (NYSE:EXH) reported that, following the merger of Hanover Compressor Company and Universal Compression Holdings into Exterran, Exterran has completed a refinancing of the outstanding debt of Hanover and Universal by closing two new debt facilities. Exterran entered into a $1.65 billion senior secured credit facility, consisting of an $850 million five-year revolving line of credit and an $800 million six-year term loan, with a syndicate of financial institutions as well as a $1.0 billion asset-backed securitization (ABS) facility. Initial borrowings under these facilities include approximately $65 million under the revolving line of credit, $800 million under the term loan and $400 million under the ABS facility. As a result of these new Exterran facilities, all of the debt of Universal and Hanover has been retired or refinanced, other than Hanover's convertible debt securities, the credit facility of Exterran Partners, L.P. (formerly known as Universal Compression Partners, L.P.), and Hanover's equipment trust notes. On Friday, August 17, 2007, Hanover called for redemption all $383 million aggregate principal amount of its equipment trust notes. Those notes will be refinanced with additional borrowings under Exterran's new ABS facility.

"We are pleased by the strong market execution and attractive terms of these credit facilities, which we believe reflect the capital markets' confidence in Exterran's financial strength and business strategy," said J. Michael Anderson, Exterran's Senior Vice President and Chief Financial Officer. "This refinancing will provide Exterran with approximately $10 million to $12 million per year in ongoing interest expense savings, compared to the combined interest expense levels of Universal and Hanover today, and it gives Exterran the necessary financial flexibility to continue to pursue its business plan."

The new credit facility was arranged by Wachovia Capital Markets, LLC and J.P. Morgan Securities, Inc., as Joint Lead Arrangers, Wachovia Bank, National Association, as Administrative Agent, and JPMorgan Chase Bank, N.A., as Syndication Agent. Bank of America, N.A., Calyon New York Branch and Fortis Capital Corp. were Co-Documentation Agents. The new ABS facility was arranged and provided by Wachovia Capital Markets, LLC.

In conjunction with this debt refinancing, Exterran is expected to record during the third quarter of 2007 approximately $75 million, on a pretax basis, in debt extinguishment costs, including call premium, swap termination and write-off of unamortized debt issuance costs.

Stock Repurchase Program

Exterran also announced that its Board of Directors authorized the repurchase of up to $200 million of Exterran's common stock. This authorization extends until August 2009. Exterran intends to make purchases from time to time as market conditions warrant and hold the repurchased shares in treasury for general corporate purposes.