Cardinal Health begins $1.2 billion tender for nine series of notes

By Jennifer Chiou

New York, Aug. 27 - Cardinal Health, Inc. announced a cash tender offer to purchase up to $1.2 billion of nine series of long-term debt securities.

The Dublin, Ohio, health care company added that the tender offer is part of a previously announced plan to reduce its long-term debt after the completion of the planned spinoff of CareFusion Corp. and includes notes issued by both Cardinal Health and one if its wholly owned subsidiaries, Allegiance Corp.

The offer ends at 11:59 p.m. ET on Sept. 24.

The offer is conditioned on the completion of the planned spinoff of CareFusion and Cardinal Health as well as a cash distribution from CareFusion of about $1.4 billion.

Affected notes, listed in acceptance priority level, and their payouts per $1,000 principal amount include:

• Allegiance's 7.8% debentures due Oct. 15, 2016 with a total consideration of $1,105;

• Cardinal Health's 6.75% notes due Feb. 15, 2011 with a payout of $1,072.50;

• Cardinal Health's 6% notes due June 15, 2017 with a payout of $1,062.50;

• Allegiance's 7% debentures due Oct. 15, 2016 with a total consideration of $1,010;

• Cardinal Health's 5.85% notes due Dec. 15, 2017 with a payout of $1,052.50;

• Cardinal Health's 5.8% notes due Oct. 15, 2016 with a payout of $1,051.25;

• Cardinal Health's 5.65% notes due June 15, 2012 with a payout of $1,070;

• Cardinal Health's 5.5% notes due June 15, 2013 with a total consideration of $1,057.50; and

• Cardinal Health's 4% notes due June 15, 2015 with a payout of $965.

The payouts include a $30.00 early tender payment for those who tender by 5 p.m. ET on Sept. 10.

The company noted that it is only offering to purchase up to $100 million of the 7% debentures.

Settlement is slated for Sept. 11 for the Cardinal Health notes and Sept. 14 for notes issued by Allegiance.

The company said it will also pay accrued interest.

Cardinal Health said it will fund the purchase of the Allegiance Corp. notes from cash on hand and will fund the purchase of the Cardinal Health notes from the cash distribution from CareFusion.

The company added that the balance of the cash distribution will be used to retire its floating-rate notes due October 2009.

The dealer managers are Barclays Capital Inc. (800 438-3242 or call collect 212 528-7581), RBS Securities Inc. (877 297-9832 or call collect 203 897-6145) and UBS Securities LLC (888 719-4210 or call collect 203 719-4210). The co-dealer managers are Deutsche Bank Securities Inc. and Goldman, Sachs & Co. D.F. King & Co. Inc. is the information agent (call collect 212 269-5550 or 800 431-9645).

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