Textron holders tender $122.32 million of 4.5% notes due 2010 in offer

By Angela McDaniels

Tacoma, Wash., Sept. 22 - Textron Inc. received tenders for $122,318,000 principal amount, or 49%, of its $250 million of 4.5% notes due Aug. 1, 2010, according to a company news release.

As previously reported, Textron and its wholly owned subsidiary, Textron Financial Corp., began tender offers for up to $650 million principal amount of their debt securities on Sept. 14.

The tender offer for any and all of the 4.5% notes was the first of five separate offers being made by the companies.

In the second offer, Textron will 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 is offering 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 will purchase up to $150 million of its $471,907,000 of 6% notes due Nov. 20, 2009.

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

The maximum principal amount of 5.125% notes to be accepted in the third offer will be equal to the difference between $500 million and the sum of the principal amount of 4.5% notes and 6.5% notes purchased.

The maximum principal amount of 4.6% notes to be accepted in the fourth offer will be 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.

If the principal amount of notes tendered in an offer is greater than the cap for that offer, those notes will be accepted for purchase on a pro rata basis. In the case of the third and fourth offers, if the 5.125% notes are subject to proration, no 4.6% notes will be purchased.

For each $1,000 principal amount, the purchase price is $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 includes a $30.00 early tender payment for notes tendered by 5 p.m. ET on Sept. 25.

The companies will also pay accrued interest up to but excluding the settlement date. For the 4.5% notes, the settlement date was expected to be Sept. 22.

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

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

The companies expect to use available cash on hand to fund the offers, and Textron may 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) are the dealer managers, and Global Bondholder Services Corp. (866 952-2200 or 212 430-3774) is the information agent.

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

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