Textron, subsidiary purchase $587.3 million of notes in tender offers

By Angela McDaniels

Tacoma, Wash., Oct. 13 - Textron Inc. and its wholly owned subsidiary, Textron Financial Corp., accepted $587,303,000 principal amount of notes for purchase in their tender offers for up to $650 million principal amount of debt securities, according to an 8-K filing with the Securities and Exchange Commission.

The companies began five separate offers on Sept. 14:

• In the first offer, Textron offered to purchase any and all of its $250 million of 4.5% notes due Aug. 1, 2010;

• In the second offer, Textron offered to purchase up to $150 million of its $300 million of 6.5% notes due June 1, 2012;

• In the third and fourth offers, Textron Financial offered to purchase a portion of its $317,332,000 of 5.125% medium-term notes, series E, and $385,779,000 of 4.6% medium-term notes, series E;

• In the fifth offer, Textron Financial offered to purchase up to $150 million of its $471,907,000 of 6% notes due Nov. 20, 2009.

The companies received tenders for $122,318,000 of the 4.5% notes, $145,948,000 of the 6.5% notes, $152,555,000 of the 5.125% notes, $238,995,000 of the 4.6% notes and $87,314,000 of the 6% notes.

Textron Financial accepted $79,168,000 of the 4.6% notes tendered. For each remaining series of notes, all notes tendered were accepted for purchase.

The principal amount of 5.125% notes accepted in the third offer was subject to a cap equal to the difference between $500 million and the sum of the principal amount of 4.5% notes and 6.5% notes purchased.

The principal amount of 4.6% notes accepted in the fourth offer was subject to a cap equal to the difference between $500 million and the sum of the principal amount of 4.5% notes, 6.5% notes and 5.125% notes accepted.

For each $1,000 principal amount, the purchase price was $1,017.50 for the 4.5% notes, $1,040.00 for the 6.5% notes, $1,002.50 for the 5.125% notes, $1,015.00 for the 4.6% notes and $1,002.50 for the 6% notes.

For all but the 4.5% notes, the purchase price included a $30.00 early tender payment for notes tendered by 5 p.m. ET on Sept. 25.

The companies also paid accrued interest up to but excluding the settlement date, which was Oct. 13.

The offer for the 4.5% notes expired at 5 p.m. ET on Sept. 21. The remaining offers expired at 11:59 p.m. ET on Oct. 9.

The offers were not subject to any minimum or financing conditions.

Textron said the purpose of the offers, together with a public offering of notes, was to lengthen the maturity profile of the companies' debt.

The companies expected to use available cash on hand to fund the offers, and Textron previously said it might also use proceeds from the public offering of its notes.

J.P. Morgan Securities Inc. (866 834-4666 or 212 834-3424) and Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955) were the dealer managers, and Global Bondholder Services Corp. (866 952-2200 or 212 430-3774) was the information agent.

Textron is an aircraft, industrial and finance company based in Providence, R.I.

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