Toll Brothers begins exchange offer for 6 7/8% notes, 5.95% notes

By Angela McDaniels

Tacoma, Wash., Feb. 3 - Toll Brothers, Inc. subsidiary Toll Brothers Finance Corp. began an offer to exchange new 5 7/8% senior notes due Feb. 15, 2022 for any and all of its $139.8 million of 6 7/8% senior notes due 2012 and $141.6 million of 5.95% senior notes due 2013, according to a company news release.

The new notes will comprise part of the same series as, and are expected to be fungible with, the $300 million of notes that Toll Brothers Finance priced Jan. 31.

The new notes have a make-whole call at Treasuries plus 50 basis points until Nov. 15, 2021, and they can be redeemed after that date at par.

For each $1,000 principal amount of notes exchanged by the early tender date, 5 p.m. ET on Feb. 16, holders will receive an amount of new notes equal to the total exchange consideration, which includes a $20.00 early exchange premium. The total exchange consideration is $1,013.38 for the 6 7/8% notes and $1,034.06 for the 5.95% notes.

Holders who tender after the early tender date will not receive the early exchange premium.

The total exchange considerations equal $1,000 times the exchange price of the outstanding notes divided by a reopening price of $1,027.50. The exchange price is $1,041.25 for the 6 7/8% notes and $1,062.50 for the 5.95% notes.

All holders who tender will receive an amount in cash equal to interest accrued on the old notes up to but excluding the settlement date minus the amount of interest accrued on the new notes that they receive.

The exchange offer will expire at midnight ET on March 2.

The exchange offer is subject to the completion of the new issue, the new notes issuable in the exchange offer being fungible with the notes issued for cash and the registration statement for the exchange offer being declared effective. The exchange offer is not conditioned on the tender of a minimum principal amount of notes.

The dealer managers are Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527) and RBS Securities Inc. (877 297-9832 or 203 897-4825). The exchange and information agent is D.F. King & Co., Inc. (800 431-9645 or 212 269-5550).

Toll Brothers builds luxury homes and is based in Horsham, Pa.

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