Macy's ups offer for four note series to $700 million, sets pricing

By Toni Weeks

San Diego, Nov. 13 - Macy's, Inc. subsidiary Macy's Retail Holdings, Inc. announced the pricing for its cash tender offer for notes from four series of debentures.

The company also said in a separate press release that it increased the total amount of notes to be repurchased to $700 million due to the positive response to the offers. When the offers began on Oct. 29, the company had intended to accept up to $500 million of notes from the four series of notes.

Macy's also announced it has also extended the early tender date to 5 p.m. ET on Nov. 16 from 5 p.m. ET on Nov. 9.

The company will accept tenders from the following note series, which are listed in order of priority:

• $976,966,000 of 5.9% senior notes due 2016;

• $122.7 million of 7.45% debentures due 2016;

• $100 million of 7.5% debentures due 2015; and

• $611,875,000 of 7.875% senior notes due 2015.

The maximum principal amount of 5.9% notes due 2016 that will be repurchased has now been set to $400 million, the release noted.

The company will pay per $1,000 principal amount of notes $1,195.41 for the 5.9% notes, $1,235.28 for the 7.45% debentures, $1,159.86 for the 7.5% debentures and $1,179.53 for the 7.875% notes.

The amounts include a $30.00 early tender premium for notes tendered by the early tender date. Notes tendered after that date but before the expiration date, 11:59 p.m. ET on Nov. 27, will not receive the early tender premium.

The company will also pay accrued interest up to, but not including the settlement date, which is still expected to be Nov. 28.

The actual purchase price was determined at 2 p.m. ET on Nov. 13 by the dealer managers with reference to a fixed spread over the yield based on the bid-side price of the applicable reference U.S. Treasury security.

The applicable U.S. Treasury security for each note series, along with the fixed spread, was as follows:

• 0.75% U.S. Treasury note due Oct. 31, 2017 plus 30 basis points for the 5.9% notes;

• 0.75% U.S. Treasury note due Oct. 31, 2017 plus 60 bps for the 7.45% notes;

• 0.25% U.S. Treasury note due Oct. 15, 2015 plus 70 bps for the 7.5% notes; and

• 0.25% U.S. Treasury note due Oct. 15, 2015 plus 62 bps for the 7.875% notes.

The offer is conditioned on the sale by Macy's Retail Holdings of new debt in an amount at least equal to the principal amount of notes tendered.

"Given the current low interest-rate environment, we expect to extend a portion of our near-term debt maturities at lower rates, both decreasing our ongoing interest expense and protecting us against potential future rate increases, Macy's chief financial officer Karen M. Hoguet said in a press release.

Credit Suisse Securities (USA) LLC (800 820-1653) is the coordinating dealer manager for the tender offer. Bank of America Merrill Lynch (888 292-0070) and J.P. Morgan Securities LLC (866 834-4666) are additional dealer managers.

Global Bondholders Services Corp. (212 430-3774 or 866 873-6300) is the information agent and depositary.

Cincinnati-based Macy's operates about 840 department stores.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.