AIG announces pricing, yields for 23 series tender totaling $6 billion

By William Gullotti

Buffalo, N.Y., April 6 – American International Group, Inc. announced the pricing terms and reference yields for 23 separate cash tender offers for up to $6 billion, according to a press release on Wednesday.

As previously reported, the 23 series each have an acceptance priority order but will not be prorated. All of the notes were issued by AIG, with the exception of the fifth series which was issued by Validus Holdings, Ltd.

The notes, listed by acceptance priority order each with considerations payable per $1,000, €1,000 or £1,000 principal amount, priced as follows with yields where applicable:

• £42 million outstanding 5.75% series A-2 junior subordinated debentures due March 15, 2037 (Cusip: 026874BF3) with a first par call date of March 15, 2017 at the fixed redemption amount of £1,000;

• €91 million outstanding 4.875% series A-3 junior subordinated debentures due March 15, 2037 (Cusip: 026874BG1) with a first par call date of March 15, 2017 at the fixed redemption amount of €972.50;

• $198 million outstanding 8.175% series A-6 junior subordinated debentures due May 15, 2058 (Cusip: 026874BS5) with a first par call date of May 15, 2038 at the fixed redemption amount of $1,397.50;

• $64 million outstanding 6.25% series A-1 junior subordinated debentures due March 15, 2037 (Cusip: 026874BE6) at the fixed redemption amount of $1,070;

• $214 million outstanding 8.875% senior notes due 2040 issued by Validus due Jan. 26, 2040 (Cusip: 91915WAB8) with pricing based on the 2.375% U.S. Treasury due Feb. 15, 2042 plus 175 basis points resulted in a total consideration of $1,519.63 based on a Treasury yield of 2.825%;

• £500 million outstanding 5% notes due April 26, 2023 (ISIN: XS0252367775) with pricing based on the 0.125% U.K. Treasury due Jan. 31, 2023 plus 75 bps resulted in a total consideration of £1,030.37 based on a Treasury yield of 1.293%;

• $500 million outstanding 4.7% notes due July 10, 2035 (Cusip: 026874DE4) with a first par call date of Jan. 10, 2035 and with pricing based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 135 bps resulted in a total consideration of $1,073.08 based on a Treasury yield of 2.614%;

• $1.25 billion outstanding 3.75% notes due July 10, 2025 (Cusip: 026874DD6) with a first par call date of April 10, 2025 and with pricing based on the 1.75% U.S. Treasury due March 15, 2025 plus 45 bps resulted in a total consideration of $1,016.53 based on a Treasury yield of 2.719%;

• $2.25 billion outstanding 4.5% notes due July 16, 2044 (Cusip: 026874DA2) with a first par call date on Jan. 16, 2044 and with pricing based on the 2.375% U.S. Treasury due Feb. 15, 2042 plus 120 bps resulted in a total consideration of $1,068.40 based on a Treasury yield of 2.825%;

• $1.6 billion outstanding 3.4% notes due June 30, 2030 (Cusip: 026874DR5) with a first par call date of March 30, 2030 and with pricing based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 90 bps resulted in a total consideration of $991.88 based on a Treasury yield of 2.614%;

• $800 million outstanding 4.375% notes due Jan. 15, 2055 (Cusip: 026874DB0) with a first par call date of July 15, 2054 and with pricing based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 135 bps resulted in a total consideration of $1,065.13 based on a Treasury yield of 2.663%;

• $1 billion outstanding 4.125% notes due Feb. 15, 2024 (Cusip: 026874CY1) with pricing based on the 2.75% U.S. Treasury due Feb. 15, 2024 plus 25 bps resulted in a total consideration of $1,024.10 based on a Treasury yield of 2.53%;

• $1.2 billion outstanding 3.875% notes due Jan. 15, 2035 (Cusip: 026874DC8) with a first par call date of July 15, 2034 and with pricing based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 130 bps resulted in a total consideration of $996.06 based on a Treasury yield of 2.614%;

• $750 million outstanding 4.2% notes April 1, 2028 (Cusip: 026874DK0) with a first par call date of Jan. 1, 2028 and with pricing based on the 1.875% U.S. Treasury due Feb. 28, 2027 plus 70 bps resulted in a total consideration of $1,039.20 based on a Treasury yield of 2.741%;

• $1 billion outstanding 4.375% notes due June 30, 2050 (Cusip: 026874DP9) with a first par call date of Dec. 30, 2049 and with pricing based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 120 bps resulted in a total consideration of $1,086.61 based on a Treasury yield of 2.663%;

• $600 million outstanding 4.25% notes due March 15, 2029 (Cusip: 026874DN4) with a first par call date of Dec. 15, 2028 and with pricing based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 90 bps resulted in a total consideration of $1,043.53 based on a Treasury yield of 2.614%;

• $584 million outstanding 6.25% notes due May 1, 2036 (Cusip: 026874AZ0) with pricing based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 150 bps resulted in a total consideration of $1,226.34 based on a Treasury yield of 2.614%;

• $143 million outstanding 6.82% notes due Nov. 15, 2037 (Cusip: 026874CW5) with pricing based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 155 bps resulted in a total consideration of $1,302.48 based on a Treasury yield of 2.614%;

• $750 million outstanding 4.8% notes due July 10, 2045 (Cusip: 026874DF1) with a first par call date of Jan. 10, 2045 and with pricing based on the 2.375% U.S. Treasury due Feb. 15, 2042 plus 120 bps resulted in a total consideration of $1,114.74 based on a Treasury yield of 2.825%;

• $1 billion outstanding 4.75% notes due April 1, 2048 (Cusip: 026874DL8) with a first par call date of Oct. 1, 2047 and with pricing based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 125 bps resulted in a total consideration of $1,134.21 based on a Treasury yield of 2.663%;

• $1.5 billion outstanding 3.9% notes due April 1, 2026 (Cusip: 026874DH7) with a first par call date of Jan. 1, 2026 and with pricing based on the 1.875% U.S. Treasury due Feb. 28, 2027 plus 55 bps resulted in a total consideration of $1,021.25 based on a Treasury yield of 2.741%;

• $1.5 billion outstanding 2.5% notes due June 30, 2025 (Cusip: 026874DQ7) with a first par call date of May 30, 2025 and with pricing based on 1.75% U.S. Treasury due March 15, 2025 plus 45 bps resulted in a total consideration of $979.60 based on a Treasury yield of 2.719%; and

• €1 billion outstanding 1.875% notes due June 21, 2027 (ISIN: XS1627602201) with a first par call date of March 21, 2027 priced at the fixed redemption amount of €1,002.50.

As previously reported, the total consideration does not include the accrued coupon payment, which will be paid in cash in addition to the total consideration.

The offers expire at 5 p.m. ET on April 6, also the withdrawal deadline.

There are guaranteed delivery procedures for the offer. Notes tendered via those procedures are due by 5 p.m. ET on April 8.

Initial settlement will be April 8. Notes tendered via guaranteed delivery will be settled on April 12.

As previously reported, the offers are conditioned on the repayment of at least $5.5 billion from a promissory note previously issued by Corebridge Financial, Inc. to AIG.

BNP Paribas Securities Corp. (888 210-4358, 212 841-3059), Deutsche Bank Securities Inc. (866 627-0391, 212 250-2955), Deutsche Bank AG, London Branch (+44 20 7545 8011), Goldman Sachs & Co. LLC (800 828-3182, 212 357-1452), U.S. Bancorp Investments, Inc. (877 558-2607, 612 336-7604) and Wells Fargo Securities, LLC (866 309-6316, 704 410-4756) are the lead dealer managers for the offer.

Ipreo LLC (888 593-9546, 212 849-3880, ipreo-tenderoffer@ihsmarkit.com) is the tender and information agent.

AIG is a New York-based insurance provider.

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