Wm Morrison accepts tenders for £129.85 million, €130.71 million notes

By Angela McDaniels

Tacoma, Wash., Sept. 26 – Wm Morrison Supermarkets plc announced the results of its tender offers for its €412,742,000 of outstanding 2.25% notes due 2020, its £383.7 million of outstanding 3.5% notes due 2026 and Safeway Ltd.'s £135.05 million of outstanding 6.125% notes due 2018.

The company accepted £63.73 million principal amount of Safeway’s 6.125% notes, or 100% of the notes tendered for purchase.

In the offers for the two series of Wm Morrison notes, the company offered to repurchase a principal amount of notes such that the total amount payable is no greater than £200 million less the amount paid for Safeway’s 6.125% notes.

The company accepted €130,708,000 of the 2.25% notes, or 100% of the notes tendered for purchase, and £66,123,000 of the 3.5% notes, or 50% of the notes tendered for purchase.

The total consideration amount is £67,847,595.30 for Safeway’s notes and £193,549,150.30 for Wm Morrison’s two series of notes.

The tender offers were announced on Sept. 18 and ended at 11 a.m. ET on Sept. 25. The settlement date is expected to be Sept. 28.

Pricing was set at 6 a.m. ET on Sept. 26 as follows:

• For Safeway’s 6.125% notes, the purchase price was set at 106.461% of par using the 1.25% U.K. Treasury gilt due July 22, 2018 plus 40 basis points;

• For the 2.25% notes, the purchase price was set at 106.412% of par using a purchase yield of negative 0.1%; and

• For the 3.5% notes, the purchase price was set at 107.629% of par using the 1.5% U.K. Treasury gilt due July 22, 2026 plus 130 bps.

Holders also will receive accrued interest.

Following settlement of the offers and cancellation of the purchased notes, £71.32 million of the 6.125% notes, €282,034,000 of the 2.25% notes and £317,577,000 of the 3.5% notes will remain outstanding.

“The offers are being made in the context of the company's ongoing focus on debt reduction,” according to a previous news release. “The company intends to use its strong liquidity position to reduce the level of gross debt outstanding and the resulting interest expense.”

The dealer managers are Commerzbank AG (+49 69 136 59920 or liability.management@commerzbank.com) and Royal Bank of Scotland plc, trading as NatWest Markets, (+44 20 7678 5282 or liabilitymanagement@natwestmarkets.com). Lucid Issuer Services Ltd. (+ 44 20 7704 0880, fax +44 20 3004 1590 or morrisons@lucid-is.com) is the tender agent.

Wm Morrison is a Bradford, England-based supermarket group.

© 2015 Prospect News.
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