Tesco tenders for six series of notes in three currencies

New York, June 19 – Tesco plc announced tender offers for six series of its notes in three currencies.

The company is offering to buy up to $300 million of its $1.15 billion 6.15% senior securities due 2037 and in a separate tender up to £500 million less the amount spent in the dollar offer of euro- and sterling-denominated notes.

Tesco said in its announcements that the offers are being made as part of its continuing efforts to strengthen its balance sheet and are aimed at “efficiently using surplus liquidity to reduce gross debt.”

In the dollar offer, pricing will be set using a spread of 275 basis points over the 3% Treasury due Feb. 15, 2047.

The total includes an early tender premium of $50 per $1,000 principal amount that will only be paid to those holders who participate by the early tender deadline of 5 p.m. ET on June 30.

Pricing will be set at 11 a.m. ET on July 5.

The tender ends at 11:59 p.m. ET on July 17.

Early settlement is planned for July 6 and final settlement for July 19.

Tesco will also pay accrued interest up to but excluding the settlement date.

The dealer managers are BNP Paribas (888 210-4358, 212 841-3059, +44 20 7595 8668 or liability.management@bnpparibas.com), Goldman Sachs & Co. LLC (800 828-3182, 212 902-5183, +44 20 7774 9862 or liabilitymanagement.eu@gs.com) and RBC Capital Markets, LLC (877 381-2099, 212 618-7822, +44 20 7029 7063 or liability.management@rbccm.com).

The information agent and tender agent is D.F. King & Co., Inc. (TescoPLC@dfkingltd.com, https://sites.dfkingltd.com/tescousoffer, 212 269-5550, 800 848-3416, +44 20 7920 9700 or +852 3953 7230).

In the euro and sterling offers, Tesco’s €600 million of 5.125% notes due 2047 have first priority.

The company will buy up to £500 million equivalent of the notes less the sterling equivalent of the principal amount of notes purchased in the dollar offer.

Pricing for the euro notes will be set using a spread of 315 bps over the interpolated mid-swap rate.

The sterling notes have second priority and Tesco will buy to up £500 million of the notes less the sterling equivalent of the purchased in the dollar and euro offers.

Included in the offer are the company’s £200 million of 6% notes due 2029 to be purchased at a spread of 280 bps over the 6% Gilt due Dec. 7, 2028, its £200 million of 5.5% notes due 2033 to be purchased at a spread of 290 bps over the 4.25% Gilt due June 7, 2032, its £173 million of 4.875% notes due 2042 to be purchased at a spread of 300 bps over the 4.5% Gilt due Dec. 7, 2042 and its £279.2 million of 5.2% notes due 2057 to be purchased at a spread of 345 bps over the 4.25% Gilt due Dec. 7, 2055.

Pricing will be set at 8 a.m. ET on July 3.

Tesco will also pay accrued interest.

The tender ends at 11 a.m. ET on June 30.

Settlement is planned for July 6.

The dealer managers are BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com), Goldman Sachs International (+44 20 7774 9862 or liabilitymanagement.eu@gs.com) and RBC Europe Ltd. (+44 20 7029 7063 or liability.management@rbccm.com).

The information and tender agent is D.F. King Ltd. (+44 20 7920 9700, +852 3953 7230, TescoPLC@dfkingltd.com or https://sites.dfkingltd.com/TescoEUROFFER).

Tesco is a Cheshunt, England-based grocery and retail chain.

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