L-3 Communications to accept tenders for $300 million of 3.95% notes

By Susanna Moon

Chicago, Dec. 21 – L-3 Communications Corp. said investors had tendered $840 million of three series of notes as of 5 p.m. ET on Dec. 18, the early tender date.

Of that amount, holders had tendered $456,259,000 of the company’s $650 million 3.95% notes due 2024 by the early deadline and L-3 expects to accept for purchase $300 million of those notes, according to a company press release.

As previously announced, the company was tendering for up to $300 million of notes, including the 3.95% notes, its $350 million 1.5% notes due 2017 and its $500 million 3.95% notes due 2016.

The notes are listed in order of acceptance priority level.

Investors also had tendered $177,841,000 of the 1.5% notes and $205,562,000 of the 3.95% notes. The company said it expects to purchase none of those notes with the lower priority levels.

As previously announced, the total purchase price for each $1,000 principal amount is $986.57 for the notes due 2024, $990.03 for the notes due 2017 and $1,022.10 for the notes due 2016.

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

Pricing was set at 2 p.m. ET on Dec. 18 using the bid-side price of a reference Treasury plus a fixed spread of 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 settlement date. The initial settlement date is expected to be Dec. 22.

The tender offer had been set to run until 11:59 p.m. ET on Jan. 5. Tendered notes may no longer be withdrawn as of 5 p.m. ET on Dec. 18.

The company previously said that notes tendered before the early tender date with a higher priority level will be accepted before any tendered notes with a lower priority level.

Notes tendered after the early tender date with 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 notes tendered after the early deadline.

Notes must be tendered in minimum principal amounts of $2,000 and in increments of $1,000 after that.

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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