Beam wraps final tenders for 6.375% notes due 2014, four other series

By Marisa Wong

Madison, Wis., June 17 - Beam Inc. announced the final results and settlement of its tender offers for any and all of its 6.375% notes due 2014 and an aggregate of up to $175 million of four other notes series. According to a press release, the company received and accepted the following amounts of notes tendered by 11:59 p.m. ET on June 14, the expiration of the offers:

• $78,422,000, or 24.03%, of $326,414,000 outstanding 6.375% notes due 2014;

• $2,743,000, or 4.63%, of $59.3 million outstanding 8.625% debentures due 2021;

• $1,752,000, or 1.54%, of $113,792,000, outstanding 7.875% debentures due 2023;

• $15.68 million, or 7.84%, of $200 million outstanding 6.625% debentures due 2028; and

• $138,172,000, or 46.06%, of $300 million outstanding 5.875% notes due 2036.

The latter four series of notes are listed in order of acceptance priority level, with the 8.625% and 7.785% debentures sharing first-priority level.

As reported, holders had tendered the following amounts by 5 p.m. ET on May 31, the early tender date:

• $78,091,000, or 23.92%, of the 6.375% notes;

• $2,649,000, or 4.47%, of the 8.625% debentures;

• $1,602,000, or 1.41%, of the 7.875% debentures;

• $15,679,000, or 7.84%, of the 6.625% debentures; and

• $137,962,000, or 45.99%, of the 5.875% notes due 2036.

The early tendered notes were accepted for purchase on June 10. The remaining tendered notes settled on June 17.

Pricing for the offer was set at 2 p.m. ET on June 3 using a reference to the bid-side yield of a U.S. Treasury reference security plus a fixed spread. The total consideration per $1,000 principal amount of notes was calculated as follows:

• $1,057.63 for the 6.375% notes, based on the 0.75% Treasury note due June 15, 2014 plus 50 basis points to yield 0.662%;

• $1,378.30 for the 8.625% notes, based on the 1.75% Treasury note due May 15, 2023 plus 130 bps to yield 3.421%;

• $1,337.42 for the 7.875% notes, based on the 1.75% Treasury note due May 15, 2023 plus 155 bps to yield 3.671%;

• $1,292.51 for the 6.625% notes, based on the 1.75% Treasury note due May 15, 2023 plus 190 bps to yield 4.021%; and

• $1,225.68 for the 5.875% notes, based on the 3.125% Treasury note due Feb. 15, 2043 plus 105 bps to yield 4.303%.

The total purchase price included a $30 early tender payment for each $1,000 principal amount of notes tendered by the early tender date. Holders who tendered after the early tender date did not receive the $30 early tender payment.

The company also paid accrued interest up to but excluding the applicable settlement date.

According to the release, Beam issued a redemption notice on June 4 for the remaining outstanding 6.375% notes. The notes will be redeemed in full on July 5.

The tender offers were conditioned on the company receiving net proceeds from a debt financing transaction sufficient to purchase all notes validly tendered and accepted for purchase and to redeem the remaining notes. The company said on Monday that it funded the settlement with a portion of the proceeds from its $500 million offering of notes completed on June 10.

The tender offers, which began on May 17, are part of the company's plans "to refinance a portion of its currently outstanding debt in a favorable interest rate environment," according to a previous press release.

BofA Merrill Lynch (888 292-0070 or collect 646 855-3401) and Credit Suisse (800 820-1653 or collect 212 325-2476) are the dealer managers. D.F. King & Co., Inc. (800 769-4414 or collect 212 269-5550) is the information agent and tender agent.

Beam, formerly Fortune Brands, Inc., produces and sells spirits. The company is based in Deerfield, Ill.

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