R.R. Donnelley gives early tender update in offers for seven series

By Susanna Moon

Chicago, Sept. 15 – R.R. Donnelley & Sons Co. announced the early tender results of its cash offers for seven series of its notes as of 5 p.m. ET on Sept. 14.

As announced Aug. 31, R.R. Donnelley is offering to purchase up to $1 billion principal amount of the seven note series.

Third-party purchasers J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc. and MUFG Securities Americas Inc. are also offering to purchase R.R. Donnelley’s outstanding debt securities for up to a total purchase price, excluding accrued interest, of $294.5 million.

The third-party purchasers expect to accept for purchase all of the priority 1 notes and $178,639,000 principal amount of priority 2 notes, which is about 88% of the notes tendered for that series, according to a company update.

No tendered notes with acceptance priority levels 3 through 7 will be accepted for purchase on the early settlement date of Sept. 16, the release noted.

The company said that any of the notes not purchased in the third-party offers on the early settlement date may be purchased in the company offers after the final settlement date of Sept. 30.

The company also secured the needed consents from holders of a majority of the outstanding notes and plans to execute amendments to the supplemental indentures, which will become operative on the early settlement date.

The company is tendering for the following notes, listed in order of acceptance priority level from 1 to 7 with a total purchase price for each $1,000 principal amount:

• $251,454,000 outstanding 6 1/8% notes due 2017, with a total purchase price of $1,018.50;

• $250 million outstanding 7¼% notes due 2018, with a total purchase price of $1,102.50;

• $238,871,000 outstanding 8¼% notes due 2019, with a total purchase price of $1,167.50;

• $400 million outstanding 7% notes due 2022, with a total purchase price of $1,080;

• $350 million outstanding 6½% notes due 2023, with a total purchase price of $1,055;

• $400 million outstanding 6% notes due 2024, with a total purchase price of $1,027.50; and

• $200 million outstanding 6 5/8% notes due 2029, with a total purchase price of $1,000.

The total payment includes an early tender premium of $30.00 per $1,000 of notes tendered by the early deadline.

Holders who tender after the early deadline will receive the total amount less the early premium.

The company previously said it will not accept for purchase more than $260 million aggregate principal amount of notes with acceptance priority levels 4 through 7.

As of the early deadline, holders had tendered $95,778,000 of the 6 1/8% notes, $203,638,000 of the 7¼% notes, $217,372,000 of the 8¼% notes, $281.06 million of the 7% notes, $273,775,000 of the 6½% notes, $285.74 million of the 6% notes and $43,822,000 of the 6 5/8% notes.

The third-party purchasers will purchase notes that are first tendered with the highest acceptance priority level, up to the maximum tender payment; after that, the company will purchase the notes that are tendered with the highest acceptance priority level, subject to the company’s tender cap and the priority levels 4 through 7 cap.

The aggregate principal amount outstanding of 2017, 2018 and 2019 notes is less than the company’s tender cap, so any 2017, 2018 and 2019 notes that are tendered and not accepted for purchase in the third-party offers will be eligible for purchase under the company’s offer, as previously noted.

The company is also soliciting consents from the holders of its 2017, 2018 and 2019 notes to proposed amendments to the terms of the indenture governing those notes. The amendments would reduce the minimum notice period required in connection with a redemption of those notes to three business days from 30 days.

The offers and the consent solicitation will end at 11:59 p.m. ET on Sept. 28.

After the tender offer ends, the company plans to issue a call for any 2017, 2018 and 2019 notes not tendered in the offers.

Tenders may no longer be withdrawn, as of 5 p.m. ET on Sept. 14.

The tender offers are conditioned on (a) the transfers of R.R. Donnelley’s financial communications and data services business to Donnelley Financial Solutions, Inc. and the company’s publishing and retail-centric printing services business to LSC Communications, Inc. having been completed and each of R.R. Donnelley, Donnelley Financial and LSC Communications having become independent public companies; and (b) Donnelley Financial and LSC Communications having each completed one or more syndicated loan or capital markets transactions, resulting in proceeds sufficient to fund the tender offers. The financing transactions are expected to be completed two business days following the expiration of the tender offers.

BofA Merrill Lynch (888 292-0070 or 980 388-3646), U.S. Bancorp Investments, Inc. (877 558-2607 or 612 336-7604), MUFG Securities Americas Inc. (877 744-4532 or 212 405-7481) and PNC Capital Markets LLC (800 765-8472 or 412 762-2852) are the dealer managers and solicitation agents for the company’s tender offers and consent solicitation. Global Bondholder Services Corp. (866 924-2200 or 212 430-3774) is the depositary and information agent.

Additional information regarding the terms of the third-party offers may be obtained from J.P. Morgan Securities LLC at 866 834-4666 or 212 834-4811; Merrill Lynch, Pierce, Fenner & Smith Inc. at 888 292-0070 or 980 388-3646; Citigroup Global Markets Inc. at 800 558-3745 or 212 723-6106; or MUFG Securities Americas Inc. at 877 744-4532 or 212 405-7481.

R.R. Donnelley is a Chicago-based provider of integrated communication services.

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