Target raises cap in long-dated tender offer to $380.34 million

New York, April 15 – Target Corp. announced an increase to the maximum payment amount for its long-dated notes to $380,335,649 from $180,335,649.

The company also disclosed the early tender results in the maximum tender offer.

As of the early tender date of 5 p.m. ET on April 15, holders had tendered $429,695,000 of long-dated notes and $567,629,000 of short-dated notes, according to a news release.

Withdrawal rights expired at the early deadline.

Final results will not be available until the maximum tender offer expires at 11:59 p.m. ET on April 29, the company added.

The response by the early deadline for the long-dated notes was as follows. Notes are listed in order of priority acceptance levels, with pricing for each $1,000 principal amount to be set using a reference security plus a fixed spread:

• $208,759,000, or 24.03%, tendered of the $868,577,000 outstanding 7% notes due 2038. Pricing will be based on the 3% Treasury note due Nov. 15, 2045 with spread of 100 bps for hypothetical total purchase price of $1,508.98;

• $162,471,000, or 29.54%, tendered of the $550 million outstanding 6.35% debentures due 2032. Pricing will be based on the 3% Treasury note due Nov. 15, 2045 plus spread of 85 bps for hypothetical total purchase price of $1,362.49;

• $22,407,000, or 10.26%, tendered of the $218,332,000 outstanding 7% debentures due 2031. Pricing will be based on the 3% Treasury note due Nov. 15, 2045 plus 85 bps for a hypothetical total purchase price of $1,417.17;

• $32,593,000, or 28.14%, tendered of the $115,827,000 outstanding 6.65% debentures due 2028. Pricing will be based on the 1.625% Treasury note due Feb. 15, 2026 plus 150 bps for hypothetical total purchase price of $1,337.23; and

• $3,465,000, or 2.56%, tendered of the $135,479,000 outstanding 6.75% debentures due 2028. Pricing will be based on the 1.625% Treasury note due Feb. 15, 2026 plus 150 bps for hypothetical total purchase price of $1,333.66.

Target said it expects to buy all the notes tendered with priority level 1, 29% of the notes tendered with priority level 2 and none of the other notes.

The response for the short-dated notes is as follows, also listed in order of priority acceptance levels, with pricing per $1,000 principal amount based on a reference security plus a fixed spread:

• $165,501,000, or 13.24%, tendered of the $1.25 billion outstanding 6% notes due 2018. Pricing will be based on the 0.875% Treasury note due Jan. 15, 2018 plus 35 bps for hypothetical total purchase price of $1,082.08; and

• $402,128,000, or 40.21%, tendered of the $1 billion outstanding 5.375% notes due 2017. Pricing will be based on the 0.5% Treasury note due April 30, 2017 plus 12.5 bps for hypothetical total purchase price of $1,045.49.

The maximum payment amount for the short-dated notes is $800 million. Target expects to buy all the notes tendered.

Target previously disclosed that investors had tendered $564.83 million of its 6.5% notes due 2037 in an offer that ended at 5 p.m. ET on April 8.

The company was tendering for any and all of its $1,145,441,000 outstanding 6.5% notes as part of three separate tender offers for eight series of its notes.

The purchase price will be $1,451.17 for each $1,000 principal amount of 6.5% notes, with settlement on April 11.

Pricing was set 2 p.m. ET on April 8 using the yield of the bid-side price of the 3% Treasury due Nov. 15, 2045, which was 2.548%, plus a spread of 95 basis points.

In the other tenders, the company is offering to purchase a maximum amount of five series of long-dated notes and a maximum amount of two series of short-dated notes until 11:59 p.m. ET on April 29.

The maximum payment amount for the long-dated notes was initially $1 billion less the aggregate total amount paid for the 6.5% notes in the any and all tender offer, a total subsequently increased by $200 million.

The maximum payment amount for the short-dated notes is $800 million less the amount by which the aggregate total payment for the 6.5% notes tendered in the any and all tender offer exceeds $1 billion.

Pricing for the maximum tender offers will be set using the yield of the bid-side price of a reference Treasury at 2 p.m. ET on April 18.

The total payment in the maximum offers includes an early tender premium of $30.00 per $1,000 principal amount of notes tendered by 5 p.m. ET on April 15, the early date.

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

The company also will pay accrued interest up to but excluding the payment date, which will be May 2 for the maximum offers.

As previously reported, Target plans to use the proceeds of its recent offering of notes to fund the tender offer and for general corporate purposes.

The dealer managers are Barclays (800 438-3242 or 212 528-7581), Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811). Global Bondholder Services Corp. (866 470-3900 or 212 430-3774) is the tender and information agent.

Target is a discount merchandise retailer based in Minneapolis.

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