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AmerisourceBergen tenders for $500 million 8 1/8% notes, $300 million 7¼% notes
By Jennifer Chiou
New York, Aug. 25 - AmerisourceBergen Corp. said it launched a cash tender offer for any and all of its $500 million of 8 1/8% senior notes due in 2008 and any and all of its $300 million of 7¼% senior notes due in 2012.
The company is also soliciting consents to eliminate restrictive covenants from the notes' indentures.
For the 8 1/8% notes, AmerisourceBergen will set pricing based on the notes' redemption price on their first call date, discounted using the bid-side yield on the 4 1/8% Treasury due Aug. 15, 2008 plus 50 basis points.
For the 7¼% notes, the company will set pricing based on the redemption price of the notes on their first call date, discounted using the bid-side yield on the 4% Treasury due Nov. 15, 2012 plus 50 bps.
Pricing will be determined at 2 p.m. ET on Sept. 9.
Those who tender their notes before the consent deadline at 5 p.m. ET on Sept. 8 will receive the $30.00 per $1,000 principal amount of notes consent payment, which is included in the total calculated by the formulas.
The offer expires at 5 p.m. ET on Sept. 23.
"Successful refinancing of our current senior notes will increase our financial flexibility by allowing AmerisourceBergen to obtain long-term, lower interest rates and improved terms," chief executive officer R. David Yost said in a news release.
The offer is conditioned upon sufficient financing.
AmerisourceBergen intends to finance the offer with the proceeds of a private placement of debt, and assuming a completed tender, the company will increase to $750 million the availability of its current stock repurchase program.
Lehman Brothers Inc. (800 438-3242 or call collect 212 528-7581) is the dealer manager and solicitation agent, and D.F. King & Co., Inc. is the information agent (800 859-8508 or call collect 212 269-5550).
Based in Valley Forge, Pa., AmerisourceBergen is a pharmaceutical services company.
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