Target accepts $725.24 million of 7%, 6.5% notes in tender offers

By Angela McDaniels

Tacoma, Wash., July 16 – Target Corp. accepted $725,236,000 principal amount of notes in its tender offers and will pay $999,999,150.10 for those notes, according to a company news release.

As previously reported, the company offered to purchase up to $1 billion in aggregate purchase price of six series of notes or debentures.

The company received tenders for the following securities, which are listed in order of acceptance priority:

• $620,677,000 principal amount of its $1,489,254,000 outstanding 7% notes due 2038;

• $565,934,000 principal amount of its $1.25 billion outstanding 6.5% notes due 2037;

• $141,714,000 principal amount of its $550 million outstanding 6.35% debentures due 2032;

• $2.89 million principal amount of its $218,332,000 outstanding 7% debentures due 2031;

• $23,746,000 principal amount of its $115,827,000 outstanding 6.65% debentures due 2028; and

• $14,555,000 principal amount of its $135,479,000 outstanding 6.75% debentures due 2028.

Target accepted for purchase 100% of the 7% notes tendered. Due to oversubscription, it accepted for purchase on a pro rata basis 18% of the 6.5% notes tendered, or $104,559,000 principal amount, and none of the remaining series of notes.

The amounts of 7% notes and 6.5% notes accepted for purchase represent 41.68% and 8.36%, respectively, of these notes’ outstanding amounts.

For each $1,000 principal amount, the company will pay $1,389.79 for 7% notes tendered by the early tender date, 5 p.m. ET on June 30, and $1,359.79 for 7% notes tendered after the early tender date.

All of the 6.5% notes were tendered by the early tender date, so the price for them is $1,314.53 per $1,000 principal amount.

Holders will also receive accrued interest up to but excluding the payment date, which was expected to be July 16.

The total considerations were calculated using a fixed spread of 95 basis points over the yield based on the bid-side price of the 3.625% U.S. Treasury due Feb. 15, 2044 as of 2 p.m. ET on July 1.

The tender offers began June 17 and expired at 11:59 p.m. ET on July 15.

As of the early tender date, holders had tendered $618,761,000, or 41.55%, of the 7% notes; $565,934,000, or 45.27%, of the 6.5% notes; $141,579,000, or 25.74%, of the 6.35% debentures; $2.77 million, or 1.27%, of the 7% debentures; $23,666,000, or 20.43%, of the 6.65% debentures; and $14,523,000, or 10.72%, of the 6.75% debentures.

The tender offer was conditioned on, among other things, a new notes offering.

As previously reported, Target priced $1 billion of 2.3% five-year notes at 99.775 to yield 2.348%, or Treasuries plus 60 bps, and $1 billion of 3.5% 10-year bonds at 99.556 to yield 3.553%, or Treasuries plus 90 bps. The new notes priced June 17 and settled June 26.

Barclays (800 438-3242 or 212 528-7581), BofA Merrill Lynch (888 292-0070 or 980 387-3907) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) were the dealer managers for the tender offers. Global Bondholder Services Corp. (866 807-2200, bankers and brokers can call 212 430-3774) was the tender and information agent.

The discount merchandise chain is based in Minneapolis.

© 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.