Sara Lee accepts $470 million of 6.125%, 4.1% notes for purchase

By Angela McDaniels

Tacoma, Wash., April 3 - Sara Lee Corp. said the tender offer for its $500 million of 6.125% notes due 2032 and $400 million of 4.1% notes due 2020 is oversubscribed.

The company offered to purchase up to $470 million of the notes. They are listed in order of acceptance priority level.

Holders tendered $608,248,000 of notes, including $348,369,000 of 6.125% notes and $259,879,000 of 4.1% notes. Sara Lee accepted all of the tendered 6.125% notes and $121,631,000 of the tendered 4.1% notes for purchase, according to a company news release.

The tender offer began March 6 and ended at midnight ET on April 2.

For each $1,000 principal amount, the company will pay $1,044.97 for the 6.125% notes and $1,017.36 for the 4.1% notes. These prices include an early tender premium of $30.00 for each note tendered by the early tender date, 5 p.m. ET on March 19.

The company will also pay accrued interest up to but excluding the settlement date, which is expected to be April 3.

Pricing was set on March 20 using the 3.125% Treasury due Nov. 15, 2041 plus a spread of 230 basis points for the 6.125% notes and the 2% Treasury due Feb. 15, 2022 plus 150 bps for the 4.1% notes. The reference yield is 3.449% for the 6.125% notes and 2.357% for the 4.1% notes.

When the offer began, the company was offering to purchase up to $250 million of the 6.125% notes, up to $150 million of the 4.1% notes and up to $150 million of its $400 million of 2.75% notes due 2015, subject to an overall cap of $470 million of notes.

On March 20, the company eliminated the series-specific tender caps for the 6.125% notes and 4.1% notes and determined that it would not purchase any of the 2.75% notes.

Holders had tendered $888,607,000 principal amount of notes as of the early tender date, including $280,969,000 of the 2.75% notes.

Goldman Sachs & Co. (800 828-3182 or 212 357-4692) and Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) were the lead dealer managers. BNP Paribas Securities Corp., Lloyds Securities Inc., Mitsubishi UFJ Securities (USA), Inc. and RBS Securities Inc. were the co-dealer managers.

D.F. King & Co., Inc. (800 290-6427) was the tender agent and the information agent.

Sara Lee manufactures and markets brand-name consumer products focused primarily on meats, bakery, beverage and household products. It is based in Downers Grove, Ill.

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