Motorola sets pricing on two tender offers for $400 million of notes

By Susanna Moon

Chicago, June 7 - Motorola, Inc. said it priced the tender offers to purchase up to $400 million principal amount of four series of its outstanding debt securities at 2 p.m. ET on June 7.

In the any and all offer, Motorola is offering to purchase any and all of its $251,939,000 outstanding principal amount of 5.22% debentures due 2097.

In the Dutch auction offer, Motorola is offering to purchase a portion of its $378,669,000 of 6.5% debentures due 2025, $285.59 million of 6.5% debentures due 2028 and $446,444,000 of 6.625% senior notes due 2037.

The company will pay $797.34 for each $1,000 principal amount for the 5.22% notes, set using a reference yield of 4.152% plus 240 basis points. It was based on the bid-side price of the 4.625% U.S. Treasury note due Feb. 15, 2040.

The any and all offer was scheduled to expire at 5 p.m. ET on June 7, and the Dutch auction offer will expire at midnight ET on June 21.

The settlement date is expected to be June 8 for the any and all offer and June 22 for the Dutch auction offer.

The principal amount of debt securities to be purchased in the Dutch auction offer will be equal to the difference between $400 million and the principal amount of 5.22% debentures purchased. The amount of each series of debt securities that is purchased in the Dutch auction offer may be pro rated.

For each $1,000 principal amount, Motorola will pay the following amounts based on the bid-side price of the 4.625% U.S. Treasury note due Feb. 15, 2040:

• $994.92 to $1,019.06 for the 6.5% notes due 2025, set using a reference yield of 4.152% plus 240 bps;

• $994.40 to $1,021.30 for the 6.5% notes due 2028, set using a reference yield of 4.152% plus 240 bps; and

• $978.05 to $1,009.15 for the 6.625% notes due 2037, set using a reference yield of 4.152% plus 265 bps.

The purchase prices in the Dutch auction offer will be less a premium of between 0 bps and 25 bps, as determined by the modified Dutch auction procedure.

Under the modified Dutch auction procedure, Motorola will accept debt securities tendered in the order of lowest to highest premiums specified by the holders and will select the single lowest premium that will enable it to purchase an amount of debt securities no greater than the tender cap.

In the Dutch auction offer, holders must tender their notes by 5 p.m. ET on June 7 to receive the total payout, which includes an early tender premium of $50 per $1,000 principal amount of debt securities. Holders who tender after that time will not receive the early tender premium.

The payout ranges noted above include the early tender premium.

The company will also pay accrued interest up to the settlement date.

Neither offer is conditioned on any minimum amount of debt securities being tendered or the consummation of the other offer.

The lead dealer managers are J.P. Morgan Securities Inc. (866 834-4666 or 212 834-4802), Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955) and HSBC Securities (USA) Inc. Global Bondholder Services Corp. (866 873-7700) is the depositary and information agent.

Motorola offers technologies, products and services for mobile communications and is based in Schaumburg, Ill.

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