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Discover accepts $307.53 million of tendered 10.25% notes for exchange
By Marisa Wong
Madison, Wis., April 24 - Discover Financial Services announced the early results of the private offers to exchange its $400 million of 10.25% senior notes due 2019 and $400 million of 6.45% senior notes due 2017 for new 5.2% senior notes due 2022 and cash.
As of 5 p.m. ET on April 20, the early participation date, holders tendered $307,527,000 of the 10.25% senior notes.
As previously reported, the company is offering to exchange any and all of the 10.25% notes. The maximum amount of 6.45% notes it will exchange is equal to the lesser of (a) $50 million and (b) the difference between $250 million and the principal amount of new notes issued in exchange for 10.25% notes.
The company has decided to accept all $307,527,000 of 10.25% notes tendered. Since more than $250 million will be issued in exchange for the 10.25% notes, none of the 6.45% senior notes due 2017 will be accepted in the exchange offers.
The company expects to deliver the new notes and cash for the accepted 10.25% notes on April 27.
According to a previous announcement, the exchange price is $1,357.05 for each $1,000 principal amount of 10.25% notes and $1,136.97 for each $1,000 of 6.45% notes. These amounts include an early exchange premium equal of $50.00 for each note tendered by the early participation date.
The exchange price will be paid in the following manner:
• $1,000 principal amount of new notes; plus
• A cash amount equal to the exchange price minus the new notes value.
Holders will also receive accrued interest up to but excluding the settlement date.
The exchange offers began on April 9 and will end at 11:59 p.m. ET on May 4. The settlement date for any remaining tendered notes is expected to be May 8.
The information agent is D.F. King & Co., Inc. (800 848-3416 or, for banks and brokerage firms, 212 269-5550).
Discover is a bank holding company based in Riverwoods, Ill., that offers direct banking and payment services.
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