Schwab holders tender $256 million of 4.95% notes for exchange so far

By Susanna Moon

Chicago, Aug. 22 - Charles Schwab Corp. said that so far holders have tendered about $256 million of notes in the private exchange offer for its $750 million of 4.95% senior notes due 2014.

Holders who tendered their notes for exchange by 5 p.m. ET on Aug. 21 are to receive the total purchase price, which includes a $30.00 early premium for each $1,000 of notes, according to a previous press release.

Pricing is set to take place at 11 a.m. ET on Aug. 22, extended from Aug. 15.

Settlement for the early tendered notes is slated for Aug. 27.

The exchange offer will end at midnight ET on Aug. 28.

Holders may no longer withdraw tendered notes.

Schwab said on Aug. 15 that it extended the early participation date from 5 p.m. ET on Aug. 14. Pricing was extended from Aug. 15. The exchange offer began on Aug. 1.

As previously noted, the company is offering a like amount of new senior notes due Sept. 1, 2022 and cash, setting the exchange price using the bid-side yield on the 0.25% Treasury due May 31, 2014 and a spread of 37.5 basis points.

Based on the reference yield on July 31, the hypothetical cash payment would be $76.94 per $1,000 of notes.

Schwab will also pay accrued interest.

Completion of the offer is subject to a minimum of valid tenders for $250 million of the old notes by the early deadline. In addition, the yield on the 1.75% Treasury due May 15, 2022 may not be more than 3.8% or less than 1.25% at pricing.

The information agent is Global Bondholder Services Corp. (866 488-1500 or call collect 212 430-3774).

The offer is only open to holders who are qualified institutional buyers under Rule 144A or those outside the United States who are not U.S. persons under Regulation S.

The investment and financial services company is based in San Francisco.

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