L Brands sees $325 million of three notes tendered by early exchange deadline, sets pricing

By Wendy Van Sickle

Columbus, Ohio, June 14 – L Brands, Inc. said $325 million of three series of notes were tendered for exchange by the early deadline of its offers to trade out the notes for up to $700 million of new 6.694% notes due January 2027 and cash.

The company also announced pricing of the offers in a press release on Thursday.

The early deadline was 5 p.m. ET on June 13.

The following principal amounts of L Brands’ existing notes were tendered and accepted by the early deadline, listed with the total considerations and with the series in order of priority:

• $61,619,000 of the $400 million of 7% senior notes due 2020. For each $1,000 principal amount, the company will issue $850 of new notes and pay a $170.94 in cash, set using a spread of 50 basis points over the 1.375% Treasury due April 30, 2020;

• $220,056,000 of the $1 billion of 6 5/8% senior notes due 2021. For each $1,000 principal amount, the company will issue $850 of new notes and pay $182.87 in cash, set using a spread of 80 bps over the 2.25% Treasury due March 31, 2021; and

• $43.84 million of $1 billion of 5 5/8% senior notes due 2022. For each $1,000 principal amount, the company will issue $950 of new notes and pay $32.15 in cash, set using a spread of 190 bps over the 2% Treasury due Feb. 15, 2022.

All the total considerations include an early tender premium of $50.00 per $1,000 principal amount, which will only be paid to holders who tendered by the early deadline.

The tenders were announced on May 31 and end at 11:59 p.m. ET on June 27.

Pricing was set at 11 a.m. ET on June 14.

In addition to the overall $700 million cap, no more than $100 million of the new notes will be issued in exchange for the 5 5/8% notes.

Notes will be accepted in order of priority, but notes tendered before the early deadline will have priority over those tender after, regardless of their priority ranking.

The new notes will mature on Jan. 15, 2027 and will have a coupon of 6.694%, which is equal to the bid-side yield of the 10-year Treasury note on the pricing date plus 375 bps.

The exchange is intended to extend the maturity of the company’s debt, according to a previous news release.

Conditions to the tender originally included that at least $300 million of new notes be issued and that the pricing levels would not result in the new notes and the outstanding notes being treated as “substantially different” under ASC 470-50 and that any new notes issued on the final settlement date be treated as part of the same issue as those issued on the early settlement date for federal income tax purposes.

However, the company said it waived the condition that at least $300 million of new notes must be issued and expects to issue about $297 million of new notes in exchange for the notes that have been tendered.

The new notes will be not be registered under the 1933 Securities Act and the exchange is being conducted under Rule 144A and Regulation S.

D.F. King & Co. (212 269-5550, 888 548-6498, lb@dfking.com or www.dfking.com/lb) is the information agent.

L Brands is based in Columbus, Ohio and owns the Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri Bendel brands.

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