Dr Pepper Snapple calls 6.82% notes due 2018; July 6 redemption set

By Susanna Moon

Chicago, June 6 – Dr Pepper Snapple Group Inc. issued a redemption notice for its 6.82% notes due 2018 on Monday after giving an early tender update in the offer that began May 19.

The notes will be redeemed on July 6 at the greater of par and the sum of the present values of the remaining scheduled payments of the notes to be redeemed discounted to the redemption date on a semiannual basis at the Treasury rate plus 45 basis points plus accrued interest to but excluding the redemption date, according to an 8-K filing with the Securities and Exchange Commission.

As announced June 5, investors had tendered $62,698,000 of its 6.82% notes due 2018 as of 5 p.m. ET on June 2, the early tender date, in the offer for two series.

The company then amended the offers and raised the maximum purchase price to $250 million from $180 million.

Holders also had tendered $156,911,000 of the company’s 7.45% notes due 2038 as of the early deadline.

The company said it planned to accept for purchase the tendered 7.45% notes using a proration rate of about 79.7% and all of the tendered 6.82% notes due 2018.

The tenders will remain open until 11:59 p.m. ET on June 16. Tendered notes may not be withdrawn after the early deadline.

The company said on May 19 that it was offering to spend up to $180 million for its $250 million of outstanding 7.45% notes and $364,128,000 of outstanding 6.82% notes.

Pricing was set at 2 p.m. ET on June 5 using a reference security plus a fixed spread for a purchase price per $1,000 principal amount as follows, with the notes listed in order of priority acceptance level:

• $1,461.25 for the 7.45% notes due 2038 with a tender cap of $125 million, using the 3% Treasury note due Feb. 15, 2047 plus a fixed spread of 130 basis points; and

• $1,044.27 for the 6.82% notes, using the 0.75% Treasury note due April 30, 2018 plus 45 bps.

The total purchase price includes 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 to but excluding the settlement date of June 19.

The purchase price will be determined using the fixed spread for each series of notes over the reference yield based on the bid-side price of the U.S. Treasury security.

The offers contain a financing condition.

The company sold a combined $400 million of senior notes due 2027 and 2045 on June 5, according to a market source.

Morgan Stanley & Co. LLC (800 624-1808) is the dealer manager. Requests for the offer may be directed to D.F. King & Co. (212 269-5550 or 877 536-1556).

Dr Pepper Snapple is a maker of non-alcoholic beverages and is based in Plano, Texas.

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