TIAA prices tender offer for 6.85% surplus notes due 2039, lifts cap

By Wendy Van Sickle

Columbus, Ohio, May 3 – Teachers Insurance and Annuity Association of America upsized and announced pricing in its tender offer for its 6.85% surplus notes due 2039 on Wednesday.

TIAA expanded the maximum amount of notes it will accept to $950 million from $750 million, according to a press release.

Earlier in the day, the issuer said investors had tendered $1,038,470,000 of its $2 billion of notes as of the early deadline of 5 p.m. ET on May 2.

The company said it will pay a total consideration of $1,392.52 per $1,000 principal amount.

Pricing was set at 2 p.m. ET on May 3 using the bid-side price of the 2.875% U.S. Treasury note due Nov. 15, 2046 plus 120 basis points.

There will be an early tender premium of $50 for each $1,000 principal amount tendered by the early deadline.

The issuer will also pay accrued interest to the settlement date.

TIAA began the tender on April 19.

The deadline to withdraw tendered notes was 5 p.m. ET on May 2.

The tender offer will continue until midnight ET at the end of May 16.

The company previously said that if the amount of notes tenders exceeded the tender cap, notes would be accepted for purchase on a prorated basis.

The offer is subject to a financing condition.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-8553) are the joint lead dealer managers.

Global Bondholder Services Corp. (212 430-3774, 866 470-3700 or contact@gbsc-usa.com) is the tender agent and information agent.

New York-based Teachers Insurance & Annuity Association of America is a provider of financial services in the academic, research, medical, cultural and government fields.

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