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Dr Pepper offers up to $180 million in tenders for 7.45%, 6.82% notes
By Susanna Moon
Chicago, May 19 – Dr Pepper Snapple Group Inc. began cash tender offers to spend up to $180 million for its $250 million of outstanding 7.45% notes due 2038 and $364,128,000 of outstanding 6.82% notes due 2018.
Pricing will be set at 2 p.m. ET on June 5 using a reference security plus a fixed spread for a hypothetical purchase price per $1,000 principal amount as follows, with the notes listed in order of priority acceptance level:
• For the 7.45% notes due 2038 with a tender cap of $125 million, the 3% Treasury note due Feb. 15, 2047 plus a fixed spread of 130 basis points for a total hypothetical purchase price of $1,446.78; and
• For the 6.82% notes, the 0.75% Treasury note due April 30, 2018 plus 45 bps for a total hypothetical purchase price of $1,046.35.
The total purchase price includes an early tender premium of $30.00 per $1,000 principal amount of notes tendered by 5 p.m. ET on June 2, the early tender date.
The tenders will remain open until 11:59 p.m. ET on June 16. Tendered notes may be withdrawn before the early deadline.
Holders will also receive accrued interest to but excluding the settlement date, which will be June 8 for early tendered notes and June 19 for any remaining tenders.
The hypothetical purchase price was set using the reference yield of the reference Treasury security as of 2 p.m. ET on May 18, with an early settlement date on June 8.
The purchase price will be determined using the fixed spread for each series of notes over the reference yield based on the bid-side price of the U.S. Treasury security.
The offers contain a financing condition, according to a company announcement.
Morgan Stanley & Co. LLC (800 624-1808) is the dealer manager. Requests for the offer may be directed to D.F. King & Co. (212 269-5550 or 877 536-1556).
Dr Pepper Snapple is a maker of non-alcoholic beverages and is based in Plano, Texas.
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