L-3 Communications prices tender offer for $300 million of notes

By Angela McDaniels

Tacoma, Wash., Dec. 18 – L-3 Communications Corp. set the prices it will pay in the tender offer for up to $300 million of its $650 million 3.95% notes due 2024, $350 million 1.5% notes due 2017 and $500 million 3.95% notes due 2016, according to a company news release.

The notes are listed in order of acceptance priority level.

For each $1,000 principal amount, the total consideration is $986.57 for the notes due 2024, $990.03 for the notes due 2017 and $1,022.10 for the notes due 2016.

In each case, the total consideration includes an early tender premium of $30.00 for each $1,000 principal amount of notes tendered by the early tender deadline, 5 p.m. ET on Dec. 18.

Pricing was determined by reference to a fixed spread over the yield based on the bid-side price of a reference Treasury at 2 p.m. ET on Dec. 18.

The fixed spread is 195 basis points for the notes due 2024, 125 bps for the notes due 2017 and 50 bps for the notes due 2016. The reference Treasury is the 2.25% Treasury due Nov. 15, 2025 for the notes due 2024 and the 0.875% Treasury due Nov. 30, 2017 for the notes due 2017 and the notes due 2016.

The company will also pay accrued interest up to but excluding the applicable settlement date. The initial settlement date is expected to be Dec. 22.

The tender offer expires at 11:59 p.m. ET on Jan. 5.

All notes tendered before the early tender date having a higher priority level will be accepted before any tendered notes having a lower priority level.

All notes tendered after the early tender date having a higher priority will be accepted before any lower-priority notes tendered after the early tender date.

Notes tendered before the early deadline will be given priority over all notes tendered after the early deadline.

Notes must be tendered in minimum principal amounts of $2,000; additional tendered sums must be in increments of $1,000.

The offer is not conditioned on a minimum principal amount of notes being tendered.

Deutsche Bank Securities (866 627-0391), BofA Merrill Lynch (888 292-0070) and Wells Fargo Securities (866 309-6316) are the dealer managers.

D.F. King & Co., Inc. (877 896-3192 or L3@dfking.com) is the tender agent and information agent.

L-3 Communications is a New York-based contractor in command, control, communications, intelligence, surveillance and reconnaissance systems, aircraft modernization and maintenance and government services. It is also a provider of electronic systems used on military and commercial platforms.

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