ITT gets tenders for $87.56 million 7.4% notes, sets price at 158.742

By Angela McDaniels

Tacoma, Wash., Oct. 19 - ITT Corp. received tenders for $87,557,000 of its $250 million of 7.4% debentures due 2025, according to a company news release.

On Sept. 20, the company offered to repurchase up to $100 million principal amount of the debentures. The tender offer expired at midnight ET on Oct. 18.

All of the tendered notes were accepted for purchase. The payment date was expected to be Oct. 19.

The purchase price is $1,587.42 per $1,000 principal amount of notes. This price includes a $50.00 early participation amount for notes tendered by the early participation date, 5 p.m. ET on Oct. 3.

The company will also pay accrued interest up to but excluding the payment date.

The price was determined based on the yield to maturity of the 6.875% Treasury due Aug. 15, 2025 plus 25 basis points. The reference yield was 2.192%, and the tender yield was 2.442%.

The 25 bps spread was determined using a modified Dutch auction method. Holders who tendered had to specify the maximum spread in excess of the reference yield that they would be willing to accept. The minimum spread was 10 bps, and the maximum spread was 50 bps.

Holders who tendered without specifying a bid spread were deemed to have specified the maximum spread.

The offer was made in connection with ITT's plan to spin off its subsidiaries, Exelis Inc. and Xylem Inc. ITT said it decided to repurchase, redeem and/or defease all of its long-term debt in connection with the spinoffs. All of the 7.4% debentures that remain outstanding after the settlement of the tender offer will be defeased.

The offer was not conditioned on any minimum principal amount of debentures being tendered.

The dealer managers were J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) and RBS Securities Inc. (877 297-9832 or 203 897-6145). The information agent was D.F. King & Co., Inc. (212 269-5550 for banks and brokers; others call 800 967-5079). The depositary was Bank of New York Mellon.

ITT is an engineering and manufacturing company that operates in the water and fluids management market, the defense and security market and the motion and flow control market. It is based in White Plains, N.Y.

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