By Angela McDaniels
Tacoma, Wash., Aug. 3 - Coca-Cola Co. plans to begin exchange offers for 16 series of notes issued by Coca-Cola Refreshments USA, Inc., according to a company news release.
Under the first offer, the company expects to exchange up to $1 billion principal amount of the following notes for new notes due 2016 issued by Coca-Cola and cash:
• $1 billion of 7.375% notes due 2014;
• $550 million of 4.25% notes due 2015;
• $300 million of 5% notes due 2013;
• $350 million of 3.75% notes due 2012; and
• $250 million of 8.5% notes due 2012.
The notes are listed in order of acceptance priority level.
In the second offer, the company expects to exchange up to $1 billion principal amount of the following notes for new notes due 2021 issued by Coca-Cola and cash:
• $416,715,000 of 8.5% notes due 2022;
• $137,379,000 of 8% notes due 2022;
• $154.64 million of 6.75% notes due 2023;
• $225,359,000 of 7.125% notes due 2017;
• $103.06 million of 4.5% notes due 2019;
• $143,412,000 of 7% notes due 2026;
• $244,433,000 of 6.95% notes due 2026;
• $203,629,000 of 6.75% notes due 2028;
• $176,379,000 of 6.7% notes due 2036;
• $122,559,000 of 6.75% notes due 2038; and
• $253,307,000 principal amount at maturity of zero-coupon notes due 2020.
The notes are listed in order of acceptance priority level.
The new notes will constitute a further issuance of and form a single series with the notes the company expects to issue for cash on Aug. 10.
Exchange prices
Holders who tender by the early participation date, 5 p.m. ET on Aug. 16, will receive the total exchange price, which includes an early participation payment. The early participation payment is $10 per $1,000 principal amount of the $350 million 3.75% notes due 2012 and $250 million 8.5% notes due 2012. For each remaining series of notes, the early participation payment is $40 per $1,000 principal amount of notes.
The total exchange price will equal the discounted value on the early settlement date of the remaining payments of principal at maturity and interest per $1,000 principal amount of notes through maturity using the yield equal to the sum of the bid-side yield of a designated U.S. Treasury security as of 11 a.m. ET on Aug. 17 plus a fixed spread, which are noted in the table below.
For each $1,000 principal amount of notes other than the zero-coupon notes, the total exchange price will include $1,000 principal amount of new notes plus a cash amount equal to the total exchange price less the new notes value.
The cash amount will be increased by unpaid interest on the old notes exchanged and decreased by the interest on the new notes issued in exchange for those old notes that has accrued up to but excluding the applicable settlement date.
For each $1,000 principal amount at maturity of zero-coupon notes, the total exchange price will include a principal amount of new notes equal to the accreted amount on the early settlement date of each $1,000 principal amount at maturity of notes plus a cash amount equal to (1) the total exchange price less (2) (x) the new notes value multiplied by (y) (i) the accreted amount on the early settlement date of each $1,000 principal amount at maturity of notes divided by (ii) $1,000.
The accreted amount as of the early settlement date is $485.38 per $1,000 principal amount at maturity.
Because the zero-coupon notes do not accrue interest, an amount representing interest on the new notes received in exchange for zero-coupon notes will be deducted from the cash payment.
The new notes value will equal the discounted value on the early settlement date of the remaining payments of principal and interest per $1,000 principal amount of the applicable series of new notes through the maturity date of that series of new notes, calculated at the pricing time using the yield equal to the sum of the bid-side yield of a designated U.S. Treasury security plus a fixed spread.
Other terms
All notes that are tendered prior to the early participation date will have priority over notes that are tendered after the early participation date. Accordingly, if the principal amount of notes tendered prior to the early participation date equals or exceeds the maximum exchange amount, no notes tendered after the early participation date will be accepted for exchange.
The exchange offers will expire at midnight ET on Aug. 30.
The settlement date is expected to be Aug. 19 for notes tendered by the early participation date and Sept. 1 for the remaining notes.
The completion of the exchange offers is subject to conditions that include a tax fungibility condition and the issuance of the new notes for cash.
The exchange offers are only being made to holders who are qualified institutional buyers as defined in Rule 144A under the Securities Act or who are persons other than U.S. persons as defined in Rule 902 under the Securities Act.
Global Bondholder Services Corp. (866 488-1500 or, for banks and brokerage firms, 212 430-3774) is the information agent.
Coca-Cola is a beverage manufacturer and distributor based in Atlanta.
Coca-Cola exchange offers
| Notes | Reference Treasury | Spread (bps) | Cash payment
|
| 7.375% notes due 2014 | 0.625% due July 15, 2014 | 20 | $167
|
| 4.25% notes due 2015 | 2.375% due Feb. 28, 2015 | 35 | $111
|
| 5% notes due 2013 | 0.375% due July 31, 2013 | 25 | $87
|
| 3.75% notes due 2012 | 0.375% due July 31, 2013 | Zero | $18
|
| 8.5% notes due 2012 | 0.375% due July 31, 2013 | Negative 5 | $37
|
| 8.5% notes due 2022 | 3.125% due May 15, 2021 | 65 | $448
|
| 8% notes due 2022 | 3.125% due May 15, 2021 | 75 | $413
|
| 6.75% notes due 2023 | 3.125% due May 15, 2021 | 80 | $315
|
| 7.125% notes due 2017 | 2.25% due July 31, 2018 | Zero | $285
|
| 4.5% notes due 2019 | 3.125% due May 15, 2021 | 5 | $123
|
| 7% notes due 2026 | 4.375% due May 15, 2041 | 20 | $302
|
| 6.95% notes due 2026 | 4.375% due May 15, 2041 | 20 | $298
|
| 6.75% notes due 2028 | 4.375% due May 15, 2041 | 30 | $284
|
| 6.7% notes due 2036 | 4.375% due May 15, 2041 | 55 | $307
|
| 6.75% notes due 2038 | 4.375% due May 15, 2041 | 55 | $323
|
| Zero-coupon notes due 2020 | 3.125% due May 15, 2021 | 25 | $285
|
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