Cox receives early tenders for $419.83 million of notes, raises some prices in waterfall offer

New York, Aug. 7 – Cox Communications, Inc., a subsidiary of Cox Enterprises, Inc., announced that it received early tenders for $419.83 million of notes in its any-and-all tender offer.

The company also extended the early deadline in its waterfall tender offer and raised the prices for two series of notes.

In the any-and-all offer, Cox received tenders for $35.56 million of its $100 million of outstanding 6.85% notes due 2018, $314.46 million of its $750 million of outstanding 6.25% notes due 2018 and $69,809,000 of its $600 million of outstanding 9.375% notes due 2019.

All the amounts are by the early tender deadline of 5 p.m. ET on Aug. 4.

Settlement of these early tenders is planned for Aug. 8.

Pricing was scheduled to be set at 11 a.m. ET on Aug. 7.

The any-an-all tender offer continues until 11:59 p.m. ET on Aug. 18, and final settlement will take place on Aug. 21.

Cox intends to redeem any notes remaining outstanding after the any-and-all tender using the notes’ make-whole call provision.

In the waterfall tender offer, Cox extended the early tender deadline to 5 p.m. ET on Aug. 9 from 5 p.m. ET on Aug. 4.

Pricing is now scheduled for 11 a.m. ET on Aug. 10 instead of 11 a.m. ET on Aug. 7 and early settlement for Aug. 11 rather than Aug. 8.

Cox also raised the price on offer for two series of notes by reducing the spread to be used in calculating the tender price.

Specifically, the spread will now be 240 basis points instead of 255 bps for the $1.25 billion of 8.375% notes due 2039 and 235 bps instead of 250 bps for the $400 million of 6.45% notes due 2036.

Cox announced the tender offers on July 24.

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, now extended for the waterfall offer.

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 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 bps 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.

Waterfall offers

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

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 a.m. ET on Aug. 7, a date now pushed back.

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 was originally 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. The spreads have been cut to 240 bps for the 8.375% notes and to 235 bps for the 6.45% 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.

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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