Wm Morrison Supermarkets tenders for up to £180 million of notes

By Angela McDaniels

Tacoma, Wash., Jan. 17 – Wm Morrison Supermarkets plc began a tender offer for Safeway Ltd.’s £200 million 6.125% notes due 2018 and a separate tender offer for its €579,847,000 2.25% notes due 2020 and £383.7 million 3.5% notes due 2026, according to a company filing with the London Stock Exchange.

The company is offering to purchase up to £180 million nominal amount of notes in the offers. The 2018 notes and the 2020 notes have first priority, and the 2026 notes have second priority.

The company will determine the allocation between the 2018 notes and the 2020 notes at its sole discretion and reserves the right to accept significantly more or significantly less (or none) of either series as compared to the other series.

The company does not intend to accept any 2026 notes for purchase unless it has accepted all valid tenders of 2018 notes and 2020 notes in full, with no pro rata scaling.

The tender offers will end at 11 a.m. ET on Jan. 23.

The purchase prices will be determined at 6 a.m. ET on Jan. 24 by reference to the sum (annualized in the case of the 2018 notes) of the relevant purchase spread and, in the case of the 2018 notes and 2026 notes, the relevant benchmark security rate or, in the case of the 2020 notes, the 2020 notes interpolated mid-swap rate.

The purchase spread is 90 bps for the 2018 notes, 15 bps for the 2020 notes and 150 bps for the 2026 notes.

The benchmark security rate is the 1.25% U.K. Treasury gilt due July 22, 2018 for the 2018 notes and the 1.5% U.K. Treasury gilt due July 22, 2026 for the 2026 notes.

The company will also pay accrued interest through the settlement date, Jan. 27.

Tender instructions must be submitted for no less than £1,000 of 2018 notes, €100,000 of 2020 notes or £100,000 of 2026 notes.

The company said the offers are being made in the context of its ongoing focus on debt reduction.

The dealer managers are Banco Santander, SA (+44 207 756 6909, +44 207 756 6646, tommaso.grospietro@santandergcb.com or king.cheung@santandergcb.com) and Royal Bank of Scotland plc (+44 20 7678 5282 or liabilitymanagement@rbs.com). The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or morrisons@lucid-is.com).

Wm Morrison is a Bradford, England-based supermarket group.

© 2015 Prospect News.
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