R.J. Reynolds Tobacco sets pricing in tender for 7¾% notes, receives tenders for $309.5 million

New York, July 5 - R.J. Reynolds Tobacco Holdings, Inc. said it has set pricing in its tender offer for its $500 million of 7¾% notes due 2006 and also said it has accepted for purchase $309.5 million or 62% of the notes that were tendered by the consent deadline.

For each $1,000 principal amount, the company will pay $1,029.90, including a $30.00 consent payment that will only be paid to holders who submitted their notes by the consent deadline.

R.J. Reynolds announced the offer on June 21, saying it would expire at midnight ET on July 19, unless extended.

The total to be paid for each $1,000 principal amount of notes was set to give a yield to the notes' maturity of May 15, 2006 equal to the yield of the 2% Treasury note due May 15, 2006 plus 50 basis points. Pricing was fixed at 2 p.m. ET on July 5.

Holders will also be paid accrued interest up to, but not including, the redemption date.

The total amount includes a consent payment of $30 for each $1,000 principal amount that will only be paid to those who opt to tender their notes prior to the consent deadline of 5 p.m. ET on July 5.

Investors may not tender their notes without delivering consents or deliver consents without tendering notes. The consent solicitation is to eliminate substantially all of the restrictive covenants and one of the events of default in the note indenture.

Conditions of the offer include that a majority of the notes must be validly tendered and the closing of the sale of at least $500 million of new notes to be issued by R.J. Reynolds, which will be used to finance the tender offer.

The Winston Salem, N.C.-based tobacco company is a wholly owned subsidiary of Reynolds American Inc.

Citigroup Global Markets Inc. (800 558-3745 or call collect 212 723-6106) and J.P. Morgan Securities Inc. (866 834-4666 or call collect 212 834-3424) are the dealer managers and solicitation agents. Global Bondholder Services Corp. is the information agent (866 470-4200 or call collect 212 430-3774).

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