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Wm Morrison tenders for Safeway notes, capped amount of two series
By Susanna Moon
Chicago, Sept. 18 Wm Morrison Supermarkets plc is tendering for Safeway Ltd.'s £135.05 million of outstanding 6.125% notes due 2018.
Wm Morrison also began capped tender offers for its 412,742,000 of outstanding 2.25% notes due 2020 and £383.7 million of outstanding 3.5% notes due 2026.
In the capped offers, the company is tendering for a principal amount of the 2020 notes and 2026 notes such that the total amount payable for those notes is no greater than £200 million less the amount paid for the 2018 notes, according to a company announcement.
The tenders will remain open until 11 a.m. ET on Sept. 25.
Pricing will be set at 6 a.m. ET on Sept. 26 as follows:
For the 2018 notes, pricing will be set using the 1.25% U.K. Treasury gilt due July 22, 2018 plus 40 basis points;
For the 2020 notes, pricing will be set using a purchase yield of negative 0.1% for a purchase price of 106.412 assuming a settlement date of Sept. 28; and
For the 2026 notes, pricing will be set using the 1.5% U.K. Treasury gilt due July 22, 2026 plus 130 bps.
Holders also will receive accrued interest.
The offers are being made in the context of the company's ongoing focus on debt reduction, the announcement noted. The company intends to use its strong liquidity position to reduce the level of gross debt outstanding and the resulting interest expense.
Tender instructions must be submitted for a minimum of £1,000 for the 2018 notes, 100,000 for the 2020 notes or £100,000 for the 2026 notes and in integrals of 1,000 or £1,000 after that.
Settlement is expected to occur on Sept. 28.
The dealer managers are Commerzbank AG (+49 0 69 136 59920 or liability.management@commerzbank.com) and Royal Bank of Scotland plc, trading as NatWest Markets, (+44 0 20 7678 5282 or liabilitymanagement@natwestmarkets.com). Lucid Issuer Services Ltd. (+ 44 0 20 7704 0880, fax +44 0 20 3004 1590 or morrisons@lucid-is.com) is the tender agent.
Wm Morrison is a Bradford, England-based supermarket group.
© 2015 Prospect News.
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