Veolia chooses early settlement for tender offer for 6.75% notes

By Angela McDaniels

Tacoma, Wash., Dec. 20 – Veolia Environnement SA has elected to have an early settlement date on Dec. 23 for the tender offer for up to $100 million principal amount of its $400 million 6.75% notes due 2038, according to a company news release.

Accordingly, the total consideration payable for each $1,000 principal amount of notes tendered by 5 p.m. ET on Dec. 10, the early participation date, and accepted for purchase will be $1,431.28.

Completion of the tender offer remains subject to some conditions.

As previously reported, holders had tendered $164,422,000 of the notes as of the early participation date.

Because the amount tendered exceeds the offer cap, the company accepted the early tendered notes for purchase on a prorated basis. The proration factor is 61.5845%.

The offer began Nov. 26 and will expire at 5 p.m. ET on Jan. 3. However, because the maximum tender amount has already been reached, the company will not accept for purchase any notes tendered after the early participation date.

The total consideration was set at 10 a.m. ET on Dec. 11 using the yield to maturity corresponding to the bid-side price of the 2.25% Treasury due Aug. 15, 2049 plus a fixed spread of 130 basis points.

On Dec. 11, the company had not yet decided whether to settle the notes on Dec. 23 or Jan. 7. Had it chosen Jan. 7, the total consideration would have been $1,430.61 per $1,000 principal amount of notes.

The total consideration includes an early tender premium equal to $50.00 per $1,000 principal amount of notes tendered by the early participation date.

Holders will also receive accrued interest.

The tender offer is being made concurrently with the closing of the previously announced sale of the company’s district energy assets in the United States through its subsidiary, Veolia Energy North America Holdings, Inc.

The company said the purpose of the offer is to reduce its outstanding debt and interest expense.

The dealer managers are Citigroup Global Markets Ltd. (800 558-3745 or +44 20 7986 8969) and MUFG Securities Americas Inc. (877 744-4532 or +44 20 7577 4048/4218).

Global Bondholder Services Corp. (866 470-4200) is the information agent.

Veolia is an environmental services provider based in Paris.

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