Pearson takes in tenders for €450 million 1.875% notes, 1.375% notes

By Susanna Moon

Chicago, Jan. 25 – Pearson plc said investors tendered €291,327,000 of the €500 million 1.875% notes due 2021 and €249,615,000 of the €500 million 1.375% notes due 2025.

The company said on Jan. 18 that its subsidiary Pearson Funding Five plc was tendering for up to €400 million of the two series of notes until 11 a.m. ET on Jan. 24.

Pearson accepted for purchase €450 million of notes after increasing the maximum acceptance amount.

Specifically, the issuer accepted €250 million of the 1.875% notes at a price of 106.19 using a proration factor of 90.517% and €200 million of the 1.375% notes at a price of 101.579 using a proration factor of 81.997%, according to a company update on Thursday.

Pricing was set at 6 a.m. ET on Jan. 25 using a purchase yield of 0% for the 1.875% notes and of 1.147% for the 1.375% notes.

For the 1.375% notes, the reference rate was 0.697% using the 2025 interpolated mid-swap rate plus 45 basis points.

The 2025 interpolated mid-swap rate was to be calculated by means of linear interpolation of the seven-year mid-swap rate and the eight-year mid-swap rate to maturity of the 2025 notes, as previously noted.

After settlement on Jan. 29, the outstanding amount will be €250 million of the 1.875% notes and €300 million of the 1.375% notes.

Holders also will receive accrued interest.

Pearson was making the offers “to optimize the source and maturity of the debt portfolio of the guarantor and its consolidated subsidiaries (the group). This reflects the group's capital allocation priorities, one of which is to maintain an appropriate capital structure,” according to a previous announcement.

BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com) and Merrill Lynch International (+44 20 7996 5420 or DG.LM_EMEA@baml.com) are the dealer managers. Lucid Issuer Services Ltd. (+44 20 7704 0880 or pearson@lucid-is.com) is the tender agent.

Pearson is a publishing and education company based in London.

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