Pearson tenders for $1 billion of 3.75%, 3.25% notes; call planned

By Susanna Moon

Chicago, Aug. 4 – Pearson Funding Four plc is tendering for its $500 million 3.75% notes due 2022, and Pearson Funding Five plc is tendering for its $500 million 3.25% notes due 2023.

The purchase price for each $1,000 principal amount will be $1,037.50 for the 3.75% notes and $1,000 for the 3.25% notes.

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

Notes may be tendered or withdrawn before the end of the offer at 5 p.m. ET on Aug. 11.

Settlement is expected to occur on Aug. 15.

The companies plan to use existing cash of Pearson plc and its consolidated subsidiaries as well as drawdowns under Pearson plc's revolving credit facility to fund the offers.

The offers are intended “to optimize the source and maturity of the group's debt portfolio,” according to an announcement.

“This reflects the group's capital allocation priorities, one of which is to maintain an appropriate capital structure.”

Notes purchased under the offers will be retired.

Citigroup Global Markets Ltd. (+44 20 7986 8969, 800 558-3745, 212 723-6106 or liabilitymanagement.europe@citi.com) and J.P. Morgan Securities LLC (+44 20 7986 8969, 866 834-4666 or 212 834-3424) are the dealer managers. D.F. King & Co., Inc. (800 991 5628, 212 269-5550, pearson@dfking.com or dfking.com/pearson) is the information and tender agent.

Call planned

In a separate notice, Pearson plc said it plans to call its $300 million 4.625% senior notes due 2018.

The redemption is contingent on the closing of the “partial disposal and recapitalization” of the issuer's stake in Penguin Random House, which is not expected to close before the end of September, according to the company notice.

Pearson is a multinational publishing and education company based in London.

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