BHP Billiton gives tender update for six series of euro, pound notes

By Susanna Moon

Chicago, Aug. 31 – BHP Billiton Ltd.’s wholly owned subsidiary, BHP Billiton Finance (USA) Ltd., announced the initial results of the tender offer for six series of notes outstanding under BHP's euro medium-term notes program that ended at 11 a.m. ET on Aug. 30.

The company also is holding a separate and concurrent tender offer for its $529,978,000 3.25% senior notes due 2021, $859,938,000 2.875% senior notes due 2022 and $1.5 billion 3.85% senior notes due 2023.

The tender will be capped $2.5 billion less the aggregate purchase price excluding accrued interest of the euro notes tendered and accepted for purchase in the euro tender offers.

In the euro offers, BHP Billiton Finance Ltd. is offering to repurchase its €1.25 billion 2.125% notes due November 2018, €600 million floating-rate notes due April 2020, €1.25 billion 2.25% notes due September 2020, €650 million 0.75% notes due October 2022, €750 million 3% notes due May 2024 and £750 million 3.25% notes due September 2024.

BHP plans to accept for purchase none of the 2018 notes, €338.38 million of the April 2020 notes, €413,228,000 of the September 2020 notes, €273,787,000 of the 2022 notes, €189,866,000 of the 2024 notes and £286,957,000 of the 2024 notes, according to a company update on Thursday.

Pricing was scheduled for 6 a.m. ET on Aug. 31 as follows:

• For the 2018 notes, pricing will be set using a tender offer yield of negative 20 bps for a tender offer price of €1,028.73 per €1,000 using a settlement date of Sept. 5;

• For the April 2020 notes, the tender offer price will be 100.9%;

• For the September 2020 notes, pricing will be set using the September 2020 interpolated mid-swap rate minus 7 bps;

• For the 2022 notes, pricing will be set using the 2022 interpolated mid-swap rate plus 0 bps;

• For the 2024 euro notes, pricing will be set using the 2024 interpolated mid-swap rate plus 6 bps; and

• For the 2024 pound notes, pricing will be set using the U.K. Treasury rate plus 68 bps.

Settlement is expected to occur on Sept. 5.

The global coordinators and lead dealer managers are Deutsche Bank AG, London Branch (+44 20 7545 8011 and UBS Ltd. (+44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com). The lead dealer managers are Banco Santander, SA (+44 20 7756 6909 / 6646, tommaso.grospietro@santandergcb.com / King.Cheung@santandergcb.com) and Societe Generale (+33 142 13 32 40 or liability.management@sgcib.com). The co-dealer managers are Lloyds Bank plc, Royal Bank of Scotland plc (trading as NatWest Markets) and UniCredit Bank AG.

The tender and information agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, fax +44 20 3004 1590 or bhp@lucid-is.com).

Dollar offers

As announced Aug. 22, BHP is offering to buy back the notes under a $2.5 billion global multi-currency bond repurchase plan for bonds issued under BHP's U.S. debt capital markets program and under the euro medium-term notes program.

The multi-currency plan will be funded by BHP's $14.2 billion cash position and the early repurchase of bonds will extend the company's average debt maturity profile and enhance the group's capital structure, the company previously said.

In the dollar offers, pricing will be set using the 1.875% U.S. Treasury note due July 31, 2022 plus a fixed spread of 55 basis points for the 3.85% notes, 35 bps for the 2.875% notes and 15 bps for the 3.85% notes. The notes are listed in order of priority acceptance levels.

Pricing will be set using the reference yield of the bid-side yield of the reference security at 11 a.m. ET on the business day following the early deadline.

The total purchase price will include an early tender premium of $30.00 for each $1,000 principal amount of notes tendered before 5 p.m. ET on Sept. 7, the early tender date.

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

The tender offers will remain open until 11:59 p.m. ET on Sept. 21.

Notes tendered before the early deadline will have priority over those tendered afterward, regardless of priority levels.

The purchase of any series of notes is not conditioned upon the purchase of any other series.

The global coordinators and lead dealer managers are Deutsche Bank Securities (212 250-2955 or 866 627-0391) and UBS Investment Bank (203 719-4210, 888 719-4210, +44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com). The lead dealer managers are J.P. Morgan (212 834-8553, 866 834-4666 or JPM_LM@jpmorgan.com) and MUFG (212 405-7481, 877 744-4532, +44 20 7577 4048/4218 or DCM-LM@int.sc.mufg.jp). The co-dealer managers are BBVA, Mizuho Securities and SMBC Nikko.

The tender and information agent is Global Bondholders Services Corp. (212 430-3774, 866 470-3800, fax 212 430-3775 or 212 430-3779).

BHP Billiton is a diversified natural resources company based in Melbourne, Australia.

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