Bayer starts tender offer for subordinated notes due 2074, 2079

By Marisa Wong

Los Angeles, Sept. 19 – Bayer AG announced a tender offer for its €1.5 billion outstanding subordinated resettable fixed-rate notes due 2074 with a first reset date of July 1, 2024 (ISIN: DE000A11QR73) and €1 billion outstanding subordinated resettable fixed-rate notes due 2079 with a first reset date of May 12, 2025 (ISIN: XS2077670003), according to a notice.

Bayer is inviting holders of both series to tender their notes for purchase for cash, up to a maximum acceptance amount.

The maximum acceptance amount across both series is expected to be equal to the principal amount of new notes that Bayer will issue in a concurrent offering. The company is proposing to issue new euro-denominated subordinated resettable fixed-rate notes with expected first optional redemption dates in 2028 and 2031.

The maximum acceptance amount will be allocated between the individual series of existing notes at the company’s discretion.

In addition, there will be a series sub-cap for the 2079 notes.

The purchase price is 99.5 for the 2074 notes and 95.375 for the 2079 notes.

The company will also pay accrued interest.

Tenders may be subject to proration.

The maximum acceptance amount and series sub-cap for the 2079 notes will be announced as soon as the new notes are priced.

The offers will expire at 11 a.m. ET on Sept. 26.

Results will be announced on Sept. 27.

Settlement is expected to occur on Sept. 29.

The tender offers are conditioned on successful completion of the new issuance.

Holders who participate in the tender offers and wish to subscribe for the new notes may be given priority in allocation of the new notes.

The purpose of the tender offers and the planned new issuance is, among other things, to proactively manage the issuer’s layer of hybrid capital. The offers also give noteholders an opportunity to sell their current holdings in the existing notes ahead of the respective first reset dates and to subscribe to the new notes. The transaction is intended to be equity credit neutral for the issuer.

Notes purchased under the offers are expected to be canceled.

Under the terms of the 2074 notes, if at least 80% of the original principal amount is purchased or redeemed, the company may exercise a clean-up call on the remaining notes.

The dealer managers for the offers are BNP Paribas (+33 1 55 77 78 94; liability.management@bnpparibas.com), Credit Agricole CIB (+44 20 7214 5903; liability.management@ca-cib.com), Goldman Sachs Bank Europe SE (+44 20 7774 4836; Liabilitymanagement.eu@ny.email.gs.com) and MUFG Securities (Europe) NV (+31 20 799 0200; liability.management@mufgsecurities.com).

The tender agent is Kroll Issuer Services Ltd. (+44 20 7704 0880; attn.: Arlind Bytyqi; bayer@is.kroll.com; https://deals.is.kroll.com/bayer).

The health care and agriculture products company is based in Leverkusen, Germany.

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