Cox Communications begins tender offers for eight series of notes

By Angela McDaniels

Tacoma, Wash., July 24 – Cox Communications, Inc., a subsidiary of Cox Enterprises, Inc., began tender offers for eight series of its notes, according to a company news release.

In the any and all offers, the company is offering to purchase any and all of its $100 million 6.85% notes due 2018, $750 million 6.25% notes due 2018 and $600 million 9.375% notes due 2019.

In the waterfall offers, the company is offering to purchase its $1.25 billion 8.375% notes due 2039, $250 million 6.95% notes due 2038, $400 million 6.45% notes due 2036, $100 million 6.95% notes due 2028 and $200 million 6.8% notes due 2028, subject to some caps.

Each offer will expire at 11:59 p.m. ET on Aug. 18. The early tender deadline for each offer is 5 p.m. ET on Aug. 4.

Cox reserves the right, at any point following the early tender deadline, to accept notes that have been tendered on a date determined at Cox’s option.

Cox currently expects the early settlement date, if any, for each offer to be Aug. 8. The final settlement date is expected to be Aug. 21.

The tender offers are conditioned on the company receiving at least $2.5 billion of net proceeds in a debt financing.

The company said the offers are meant to help it manage its debt maturity profile, opportunistically prefund existing maturities and manage its overall cost of borrowing.

Any and all offers

The total consideration for each series of notes in the any and all offers will be set by reference to a fixed spread over the yield based on the bid-side price of a reference Treasury security at 11:00 a.m. ET on Aug. 7.

The reference Treasury is the 0.875% Treasury due Jan. 15, 2018 for the 6.85% notes, the 1% Treasury due May 31, 2018 for the 6.25% notes and the 1.125% Treasury due Jan. 15, 2019 for the 9.375% notes.

The fixed spread is 20 basis points for the 6.85% notes, 35 bps for the 6.25% notes and 75 bps for the 9.375% notes.

Each total consideration will include an early tender premium of $30.00 per $1,000 principal amount of notes tendered by the early tender deadline.

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

Assuming an early settlement date of Aug. 8, the hypothetical total consideration as of 11 a.m. ET on July 21 would be $1,023.90 for the 6.85% notes, $1,037.70 for the 6.25% notes and $1,102.96 for the 9.375% notes.

Cox intends, but is not obligated, to redeem any notes that remain outstanding after completion of the any and all offers pursuant to their make-whole redemption provisions.

No any and all offer is conditioned on any minimum amount of notes being tendered, the consummation of any other any and all offer or the consummation of the waterfall offers.

Waterfall offers

In the waterfall offers, the 8.375% notes have an acceptance priority level of one, the 6.95% notes due 2038 and the 6.45% notes have acceptance priority levels of two, and the 6.95% notes due 2028 and the 6.8% notes have acceptance priority levels of three.

The maximum aggregate purchase price (excluding interest) for the waterfall offers is $1 billion. In addition, the maximum purchase price (excluding interest) is $650 million for priority-one notes, $250 million for priority-two notes and $100 million for priority-three notes.

The total consideration for each series of notes will be set by reference to a fixed spread over the yield based on the bid-side price of a reference Treasury security at 11:00 a.m. ET on Aug. 7.

The reference Treasury is the 3% Treasury due Feb. 15, 2047 for the 8.375% notes, the 6.95% notes due 2038 and the 6.45% notes and the 2.375% Treasury due May 15, 2027 for the remaining series of notes.

The fixed spread is 255 bps for the 8.375% notes and the 6.95% notes due 2038, 250 bps for the 6.45% notes and 195 bps for the 6.95% notes due 2028 and the 6.8% notes.

Each total consideration will include an early tender premium of $30.00 per $1,000 principal amount of notes tendered by the early tender deadline.

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

Assuming an early settlement date of Aug. 8, the hypothetical total consideration as of 11 a.m. ET on July 21 would be $1,382.33 for the 8.375% notes, $1,197.60 for the 6.95% notes due 2038, $1,136.31 for the 6.45% notes, $1,231.45 for the 6.95% notes due 2028 and $1,227.92 for the 6.8% notes.

No waterfall offer is conditioned on any minimum amount of notes being tendered, the consummation of any other waterfall offer or the consummation of the any and all offers.

Notes tendered by the early tender deadline will, subject to the tender caps, be accepted for purchase in priority to other notes tendered after the early tender deadline, even if such notes tendered after the early tender deadline have a higher acceptance priority level.

Cox reserves the right to increase, decrease or eliminate any of tender subcaps or the aggregate maximum tender cap.

The dealer managers are J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424), RBC Capital Markets, LLC (877 381-2099 or 212 618-7822) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760). The tender agent and information agent is D.F. King & Co., Inc. (866 620-2536 or 212 269-5550).

Cox is a broadband communications and entertainment company based in Atlanta.

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