By Marisa Wong
Madison, Wis., June 17 – Target Corp. announced it has begun cash tender offers to purchase a total of up to $1 billion of six series of notes or debentures.
The tender offer covers the following outstanding securities, listed in order of acceptance priority:
• $1,489,254,000 7% notes due 2038;
• $1.25 billion 6.5% notes due 2037;
• $550 million 6.35% debentures due 2032;
• $218,332,000 7% debentures due 2031;
• $115,827,000 6.65% debentures due 2028; and
• $135,479,000 6.75% debentures due 2028.
If any notes are tendered making the applicable payment for those notes exceed the maximum payment amount, the notes will be purchased by acceptance priority level. All notes of a series having a higher acceptance priority level will be accepted for purchase before any tendered notes having a lower acceptance priority level are accepted.
If there are sufficient remaining funds to purchase some but not all of the notes of a series, the notes will be subject to proration.
Target said it may choose to increase or decrease the tender cap.
The tender offers will expire at 11:59 p.m. ET on July 15.
Holders who tender their notes at or prior to 5 p.m. ET on June 30, the early tender date, will be eligible to receive the total consideration, which includes an early tender payment of $30 per $1,000 principal amount of notes.
Holders who tender their notes after the early tender date but at or prior to the expiration date will be eligible to receive the late tender offer consideration, which is equal to the total consideration minus the early tender payment.
The total consideration for each $1,000 of notes will be calculated using a fixed spread specified for each series plus the yield based on the bid-side price of an applicable U.S. Treasury security, as listed in the table below. The total consideration will be determined at 2 p.m. ET on July 1.
Holders will also receive accrued interest up to but excluding the payment date, which is expected to be July 16.
Notes may be withdrawn at any time at or prior to 5 p.m. ET on June 30.
The tender offer is conditioned on, among other things, a new notes offering. Concurrently with the tender offers, Target plans to issue new notes through an underwritten public offering. The company expects to use proceeds from the new notes to pay for notes tendered in the tender offers and for general corporate purposes.
Barclays (800 438-3242 or 212 528-7581 collect), BofA Merrill Lynch (888 292-0070 or 980 387-3907 collect) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106 collect) are the dealer managers for the tender offers. Global Bondholder Services Corp. (866 807-2200, bankers and brokers can call collect at 212 430-3774) is the tender and information agent.
The discount merchandise chain is based in Minneapolis.
Pricing
| Notes | Spread | Reference Treasury | Hypothetical consideration
|
| 7% notes due 2038 | 95 bps | 3.625% due Feb. 15, 2044 | $1,386.84
|
| 6.5% notes due 2037 | 95 bps | 3.625% due Feb. 15, 2044 | $1,311.71
|
| 6.35% debentures due 2032 | 75 bps | 3.625% due Feb. 15, 2044 | $1,279.36
|
| 7% debentures due 2031 | 75 bps | 3.625% due Feb. 15, 2044 | $1,344.50
|
| 6.65% debentures due 2028 | 140 bps 2.5% due May 15, 2024 | $1,281.33
|
| 6.75% debentures due 2028 | 135 bps 2.5% due May 15, 2024 | $1,288.88
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
