Wal-Mart prices $8.5 billion tender offer for 13 issues, gives update

By Susanna Moon

Chicago, Oct. 23 – Wal-Mart Stores, Inc. gave the early results of the cash tender offer for 13 series of its outstanding debt securities as of 5 p.m. ET on Oct. 20 on Monday morning.

Wal-Mart then priced the offer and said it expects to accept all of the early tendered notes in a company update later in the day.

As announced Oct. 6, the maximum aggregate purchase price is $8.5 billion, excluding accrued interest.

The offer will continue until 11:59 p.m. ET on Nov. 3.

Investors had tendered the following amount of notes as of the early deadline with pricing for each $1,000 principal amount set at 10 a.m. ET on Oct. 23 using a reference security and fixed spread and the notes listed in order of acceptance priority level:

• $310,786,000, or 17.64%, of the $1,762,000,000 of outstanding 6.5% notes due Aug. 15, 2037 with pricing set at $1,421.68 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 65 basis points for a reference yield of 2.874% and tender offer yield of 3.524%;

• $709,742,000, or 38.94%, of the $1,822,000,000 of outstanding 6.2% notes due April 15, 2038 with pricing set at $1,391.59 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 63 bps for a reference yield of 2.874% and tender offer yield of 3.504%;

• $382,319,000, or 30.59%, of the $1.25 billion of outstanding 5.625% notes due April 1, 2040 with pricing set at $1,314.64 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 70 bps for a reference yield of 2.874% and tender offer yield of 3.574%;

• $679,713,000, or 33.99%, of the $2 billion of outstanding 5.625% notes due April 15, 2041 with pricing set at $1,324.02 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 70 bps for a reference yield of 2.874% and tender offer yield of 3.574%;

• $407,061,000, or 16.28%, of the $2.5 billion of outstanding 5.25% notes due Sept. 1, 2035 with pricing set at $1,250.01 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 50 bps for a reference yield of 2.874% and tender offer yield of 3.374%;

• $605,143,000, or 48.41%, of the $1.25 billion of outstanding 5% notes due Oct. 25, 2040 with pricing set at $1,222.36 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 70 bps for a reference yield of 2.874% and tender offer yield of 3.574%;

• $276,997,000, or 36.93%, of the $750 million of outstanding 4.875% notes due July 8, 2040 with pricing set at $1,201.11 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 70 bps for a reference yield of 2.874% and tender offer yield of 3.574%;

• $317.44 million, or 42.33%, of the $750 million of outstanding 4.75% notes due Oct. 2, 2043 with pricing set at $1,191.66 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 72 bps for a reference yield of 2.874% and tender offer yield of 3.594%;

• $469,392,000, or 46.94%, of the $1 billion of outstanding 4.3% notes due April 22, 2044 with pricing set at $1,129.56 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 66 bps for a reference yield of 2.874% and tender offer yield of 3.534%;

• $289,614,000, or 28.96%, of the $1 billion of outstanding 4% notes due April 11, 2043 with pricing set at $1,078.59 using the 3% U.S. Treasury due May 15, 2047 and a fixed spread of 65 bps for a reference yield of 2.874% and tender offer yield of 3.524%;

• $206,941,000, or 27.59%, of the $750 million of outstanding 5.875% notes due April 5, 2027 with pricing set at $1,256.71 using the 2.25% U.S. Treasury due Aug. 15, 2027 and a fixed spread of 40 bps for a reference yield of 2.368% and tender offer yield of 2.768%;

• $133,752,000, or 26.75%, of the $500 million of outstanding 4.125% notes due Feb. 1, 2019 with pricing set at $1,032.69 using the 1.375% U.S. Treasury due Sept. 30, 2019 and a fixed spread of negative 5 bps for a reference yield of 1.564% and tender offer yield of 1.514%; and

• $660,391,000, or 44.03%, of the $1.5 billion of outstanding 3.625% notes due July 8, 2020 with pricing set at $1,051.05 using the 1.375% U.S. Treasury due Sept. 15, 2020 and a fixed spread of 0 bps for a reference yield of 1.686% and tender offer yield of 1.686%.

The total amount includes an early premium of $30.00 per $1,000 principal amount of notes tendered by the early deadline.

Holders will also be paid any accrued interest.

Tenders may not be withdrawn after 5 p.m. ET on Oct. 20.

The offer is subject to a financing condition.

The company will purchase early tendered notes on Oct. 24. Final settlement is expected to be Nov. 6.

The company previously said it will give priority to notes tendered before the early participation date regardless of the priority level.

Credit Suisse Securities (USA) LLC (800 820-1653, 212 325-2476, attn.: liability management group), Goldman Sachs & Co. LLC (800 828-3182, 212 902-6595, attn.: liability management group) and Wells Fargo Securities, LLC (866 309-6316, 704 410-4760, attn.: liability management group) are pricing joint lead dealer managers; BNP Paribas Securities Corp., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are also joint lead dealer managers; Barclays, HSBC Securities (USA) Inc., Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, MUFG, Santander Investment Securities Inc., Standard Chartered Bank and U.S. Bancorp Investments, Inc. are senior co-dealer managers; and CastleOak Securities, LP and Samuel A. Ramirez & Co., Inc. are co-dealer managers.

Global Bondholder Services Corp. (attn.: corporate actions, contact@gbsc-usa.com, http://www.gbsc-usa.com/Wal-Mart/, 212 430-3774, 866 924-2200) is information agent.

The discount retailer is based in Bentonville, Ark.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.