Wal-Mart tallies early tenders for dollar, sterling notes, sets pricing

By Marisa Wong

Morgantown, W.Va., June 29 – Wal-Mart Stores, Inc. announced pricing under its cash tender offers for dollar-denominated and sterling-denominated notes. Pricing, based on a reference security plus a fixed spread, was scheduled for 10 a.m. ET on June 29.

Earlier in the day on Thursday, the company gave an early tender update in its capped offers for four series of dollar notes and three series of sterling securities.

As of 5 p.m. ET on June 28, the early tender date, investors had tendered $1,238,099,000, or 41.27%, of the company’s 6.5% notes due Aug. 15, 2037 and $852,232,000, or 42.61%, of its 6.2% notes due April 15, 2038.

Holders also had tendered £418,842,000, or 41.88%, of the 4.875% notes Jan. 19, 2039.

Wal-Mart said that both parts of the tender are oversubscribed.

As a result, the company will buy all $1,238,099,000 of the 6.5% notes tendered by the early deadline and $177.57 million of the 6.2% notes on a pro rata basis. No other dollar notes will be accepted.

Similarly, the 4.875% sterling notes will be accepted on a pro rata basis and no other sterling notes will be purchased. The issuer said it accepted £354,937,000 of the 4.875% notes.

According to the latest announcement, the total consideration is $1,417.07 per $1,000 principal amount of 6.5% notes and $1,382.70 per $1,000 principal amount of 6.2% notes, in both cases based on the 3% U.S. Treasury due Feb. 15, 2047 plus a fixed spread of 75 basis points.

The total consideration for each £1,000 principal amount of 4.875% notes is £1,408.70, based on the 4.25% U.K. Treasury due 2039 plus a fixed spread of 60 bps.

The total consideration includes an early tender premium of $30.00 or £30.00 for each respective $1,000 or £1,000 principal amount of notes tendered by the early tender deadline.

As announced on June 15, Wal-Mart is tendering for up to $2 billion purchase price of dollar notes and up to £500 million purchase price of sterling securities.

The following notes, listed in order of priority acceptance levels, were included in the dollar offer:

• $3 billion of 6.5% notes due Aug. 15, 2037;

• $2 billion of 6.2% notes due April 15, 2038;

• $1.25 billion of 5.625% notes due April 1, 2040. Pricing would have been based on the 3% U.S. Treasury due Feb. 15, 2047 plus 80 bps; and

• $2 billion of 5.625% notes due April 15, 2041. Pricing would have been based on the 3% U.S. Treasury due Feb. 15, 2047 plus 80 bps.

The sterling offer covered the following notes, listed in order of priority acceptance levels:

• £1 billion of 4.875% notes due Jan. 19, 2039;

• £1 billion of 5.25% notes due Sept. 28, 2035. Pricing would have been based on the 4.5% U.K. Treasury due 2034 plus 60 bps; and

• £500 million of 5.75% notes due Dec. 19, 2030. Pricing would have been based on the 4.75% U.K. Treasury due 2030 plus 65 bps.

Holders whose notes are accepted for purchase also will receive accrued interest.

The tender offers will remain open until 11:59 p.m. ET on July 13. However, the company said it will not accept for purchase any notes tendered after the early deadline.

Securities tendered before the early participation date were given priority over those tendered afterward, regardless of the priority level.

Settlement will occur on July 6 for early tendered notes and on July 17 for any remaining tenders.

Barclays (212 528-7581, 800 438-3242, +44 20 3134-8515 or liability.management@barclays.com), J.P. Morgan Securities LLC (212 834-4811, 866 834-4666 or +44 20 7134-2468) and Mizuho Securities USA LLC (212 205-7736, 866 271-7403, +44 20 7090-6929) are the joint lead dealer managers. Credit Suisse Securities (USA) LLC, BNP Paribas Securities Corp. and Citigroup Global Markets Inc. are the senior co-dealer-managers. Santander Investment Securities Inc., BBVA Securities Inc. and RBS Securities Inc. are the co-dealer managers.

Global Bondholder Services Corp. (212 430-3774, 866 924-2200, 212 430-3774, contact@gbsc-usa.com or gbsc-usa.com/Wal-Mart/) is the information agent.

The discount retailer is based in Bentonville, Ark.

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