WPP begins exchange offer for €400 million of 6.625% bonds due 2016

By Susanna Moon

Chicago, March 12 – WPP Finance 2013 said it began an offer to exchange up to €400 million of the €750 million 6.625% guaranteed bonds due 2016 issued by WPP plc for new notes due 2018.

The notes are guaranteed by WPP 2012 Ltd., WPP Air 1 Ltd., WPP Air 3 Ltd., WPP 2005 Ltd., WPP 2008 Ltd. and WPP Jubilee Ltd.

Pricing will be set at 7 a.m. ET on March 20 for each €1,000 principal amount using the three-year mid-swap rate, with a purchase price of €1,075.33 per €1,000 principal amount using a settlement date of March 23.

The purchase price is intended to reflect a yield to maturity of the notes on the settlement date based on an exchange yield of 0%, according to a company press release.

Specifically, the purchase price will equal (a) the value of all remaining payments of principal and interest on the notes up to and including the scheduled maturity date of the notes discounted to the settlement date at a discount rate equal to the exchange yield, minus (b) the accrued interest.

Under the offer, the company will issue a minimum of €200 million of new notes at par with a new issue spread of 30 basis points and an exchange ratio of 100%.

The purpose of the exchange offer is to extend the company’s maturity profile and improve balance sheet efficiency by retiring some of the notes and refinancing with senior unsecured funding, the company said.

The exchange offer will end at 11 a.m. ET on March 19.

Noteholders must offer for exchange a minimum of €100,000 par amount of notes and in integral multiples of €1,000 after that.

The dealer managers are Barclays Bank plc (+44 20 3134 8515, attn: liability management group, email: eu.lm@barclays.com), BNP Paribas (+44 20 7595 8668, attn: liability management group, email: liability.management@bnpparibas.com), Commerzbank Aktiengesellschaft (+49 69 136 59920, attn: liability management group, email: liability.management@commerzbank.com) and Royal Bank of Scotland plc (+44 20 7678 9896, attn: liability management, email: liabilitymanagement@rbs.com).

The exchange agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, attn: David Shilson, email: wpp@lucid-is.com).

The communication services company is based in Dublin.

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