MassMutual increases tender cap for surplus notes to $440 million

By Marisa Wong

Morgantown, W.Va., March 20 – Massachusetts Mutual Life Insurance Co. said it has increased the tender cap and extended the expiration time of its cash tender offer for up to a maximum amount of its 8.875% surplus notes due 2039, 7.625% surplus notes due 2023 and 7.5% surplus notes due 2024.

The company increased the maximum tender amount to $440 million from $350 million, according to a press release.

As of 5 p.m. ET on March 16, the early tender date, the offer was oversubscribed, with a total principal amount of $734,009,000 tendered, as previously reported.

The amounts of early tenders received by the early tender date and the total considerations per $1,000 principal amount are as follows, with the notes listed in order of priority acceptance level:

• $629,577,000 of the $750 million outstanding 8.875% surplus notes due 2039, with pricing based on the 2.875% Treasury note due Nov. 15, 2046 plus 135 basis points for a total consideration of $1,616.97;

• $72,747,000 of the $250 million outstanding 7.625% surplus notes due 2023, with pricing based on the 2.25% Treasury note due Feb. 15, 2027 plus 70 bps for a total consideration of $1,235.74; and

• $31,685,000 of the $100 million outstanding 7.5% surplus notes due 2024, with pricing based on the 2.25% Treasury note due Feb. 15, 2027 plus 75 bps for a total consideration of $1,236.33.

The total purchase price includes an early tender premium of $50.00 per $1,000 principal amount of notes tendered by the early tender date.

Holders will also receive accrued interest to but excluding the settlement date.

Pricing was set at 2 p.m. on March 17.

On Monday MassMutual said it expects to settle early tendered notes accepted for purchase on March 24. Based on the increased tender cap, the issuer expects to accept for purchase $440 million of its 8.875% notes due 2039 tendered by the early deadline.

Because the aggregate principal amount of notes tendered so far exceeds the tender cap, the 8.875% notes will be purchased subject to proration, and no 7.625% notes due 2023 or 7.5% notes due 2024 will be purchased.

The tender offer is now set to run until midnight ET on March 31, extended from midnight ET on March 30. However, the company said it will not be accepting further tenders.

Tendered notes may no longer be withdrawn.

Notes tendered before the early deadline are given priority over those tendered afterward, regardless of priority level, according to a prior company announcement.

The offer contained a payment condition and also required a minimum amount of $200 million principal amount of notes being tendered.

MassMutual plans to purchase the notes in the tender offer using proceeds of surplus notes issued in the capital markets, as previously noted.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) are the joint lead dealer managers. D.F. King & Co., Inc. (212 269-5550, 866 864-7964 or mmutual@dfking.com) is the tender agent and information agent.

The tender offer opened on March 3.

MassMutual is a Springfield, Mass.-based insurance company.

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