Kohl’s begins tender offer for up to $600 million of four note series

By Susanna Moon

Chicago, June 29 – Kohl’s Corp. said it began a cash tender offer for up to $600 million principal amount of four series of its notes.

Pricing for the offer will be set using the yield of the bid-side price of the U.S. Treasury security plus a fixed spread, as follows with the notes listed in order of priority acceptance level:

• $200 million 7.25% debentures due 2029 will price using the 2.125% U.S. Treasury note due May 15, 2025 plus 240 basis points;

• $350 million 6.875% notes due 2037 will price using the 2.5% U.S. Treasury note due Feb. 15, 2045 plus 193 bps;

• $300 million 6% debentures due 2033 will be based on the 2.5% U.S. Treasury note due Feb. 15, 2045 plus 185 bps; and

• $650 million 6.25% notes due 2017 will be based on the 1% U.S. Treasury note due Dec. 15, 2017 plus 35 bps.

The tender offer will end at 11:59 p.m. ET on July 27.

Those who tender their notes by 5 p.m. ET on July 13 will receive the total payout, which will include an early tender payment of $30 per $1,000 principal amount of notes, according to a company notice.

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

The tender offer is not conditioned upon any minimum amount of notes being tendered.

All notes tendered by the early tender deadline with a higher acceptance priority level will be accepted before any notes tendered with a lower priority level, and all notes tendered after the early tender with a higher acceptance priority level will be accepted before any notes tendered after the early tender deadline with a lower acceptance priority level.

However, notes tendered on or before the early tender deadline will be accepted for purchase in priority to those tendered after the early tender deadline, even if the notes tendered after the early tender deadline have a higher acceptance priority level than those tendered before the early tender deadline.

Kohl’s said it intends to begin the redemption of some or all of the 6.25% notes due 2017 that remain outstanding following the tender offer.

Goldman Sachs & Co. (800 828-3182 or 212 357-0215) and Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) are the lead dealer managers. U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC are the co-dealer managers.

D.F. King & Co., Inc. (212 269-5550, 800 499-8541 or kohls@dfking.com) is the tender agent and information agent.

Kohl’s is a department store chain based in Menomonee Falls, Wis.

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