BHP Billiton begins any-and-all, capped offers for four note series

By Susanna Moon

Chicago, Feb. 21 – BHP Billiton plc said it began tender offers for several series of notes as part of a $2.5 billion bond repurchase plan.

BHP Billiton’s board approved the repurchase plan that targets 2018, 2019, 2021, 2022 and 2023 dollar-denominated notes and will be funded by the company's “strong $14 billion cash position,” according to a company announcement.

BHP Billiton Finance (USA) Ltd. will purchase up to $1.95 billion of the 2019, 2021, 2022 and 2023 notes, and it will redeem its $500 million 2.05% senior notes due 2018.

In the tenders, BHP Billiton Finance (USA) Ltd., a wholly owned subsidiary, is offering to purchase any and all of its $1.75 billion 6.5% senior notes due 2019, as well as a capped amount of its $1.25 billion 3.25% senior notes due 2021, $1 billion 2.875% senior notes due 2022 and $1.5 billion 3.85% senior notes due 2023.

The maximum amount will be $1.95 billion less the purchase price excluding accrued interest of the any-and-all notes.

Pricing for the tender offers will be set using a reference security plus a fixed spread as follows:

• 6.5% notes due 2019 will price using the 1.125% U.S. Treasury note due Jan. 31, 2019 plus 10 basis points;

• 3.25% notes due 2021 will price using the 1.875% U.S. Treasury note due Jan. 31, 2022 plus 25 bps;

• 2.875% senior notes due 2022 will price using the 1.875% U.S. Treasury note due Jan. 31, 2022 plus 30 bps; and

• 3.85% senior notes due 2023 will price using the 1.875% U.S. Treasury note due Jan. 31, 2022 plus 65 bps.

The any-and-all offer will end at 5 p.m. ET on Feb. 27, and the capped offers will run until 11:59 p.m. ET on March 20.

In the capped offers, the total purchase price will include a $30 early tender premium per $1,000 principal amount of notes tendered by 5 p.m. ET on March 6, the early tender date.

Holders also will receive accrued interest.

Tendered notes may be withdrawn by 5 p.m. ET on Feb. 27 in the any-and-all offer and by 5 p.m. ET on March 6 in the capped offers.

Pricing will be set at 11 a.m. ET on Feb. 27 in the any-and-all offer and at 11 a.m. ET on the business day following the early tender date in the maximum tender offers.

The joint lead dealer managers are BofA Merrill Lynch (888 292 0070, 980 387-3907, +44 20 7996 5420 or DG.LM_EMEA@BAML.com), Citigroup Global Markets Ltd. (800 558 3745, 212 723 6106, +44 20 7986 8969 or liabilitymanagement.europe@citi.com), RBC Capital Markets, LLC (877 381 2099, 212 618 7822, +44 20 7029 7063 or liability.management@rbccm.com).

The co-dealer managers are BNP Paribas, CIBC Capital Markets, HSBC and Societe Generale CIB. The tender and information agent for the tender offers is Global Bondholders Services Corp. (212 430-3774, 866 470-3800, fax 212 430-3775, 212 430-3779 or gbsc-usa.com/bhpbilliton/).

2018 notes redemption

The company is exercising the call option for its $500 million principal amount of its 2.05% senior notes due 2018.

The notes will be redeemed on March 23 at a redemption price equal to the greater of par and the sum of the present values of the remaining scheduled payments discounted to the redemption date on a semiannual basis at the Treasury rate plus a spread of 15 bps plus accrued interest to the redemption date.

BHP Billiton is a diversified natural resources company based in Melbourne, Australia.

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