Dr Pepper Snapple sets pricing terms in 6.82% notes exchange, tender

By Jennifer Chiou

New York, Dec. 9 - Dr Pepper Snapple Group, Inc. announced the considerations to be paid in its private offer to exchange up to $600 million of its $1,199,860,000 of outstanding 6.82% senior notes due 2018 as well as pricing for the tender offer to purchase up to $600 million of the 6.82% notes for cash only.

In the exchange, the company is offering a like amount of a new series of senior notes due 2020 plus $203.28 of cash per $1,000 principal amount.

The consideration to be received in the tender is $1,203.28 for each $1,000 principal amount, which was determined based on a spread of 45 basis points over the yield on the 2.625% Treasury due Nov. 15, 2020.

This amount was set at 2 p.m. ET on Dec. 9 and includes an early participation premium of $30.00 for each note exchanged by 5 p.m. ET on Dec. 9. The exchange offer yield and tender offer yield came in at 3.637%.

If pricing had been set at 10 a.m. ET on Dec. 1, the consideration would have been $1,220.13 per $1,000 principal amount. In the case of the exchange offer, this would have been broken down into $1,000 of new notes and $220.13 of cash.

The interest rate on the new notes was also determined at 2 p.m. ET on Dec. 9, and it is 4.287%, or 110 bps over the reference Treasury.

Holders will also receive accrued interest up to but excluding the settlement date.

The exchange offer is only being made to holders who are qualified institutional buyers, as defined in Rule 144A under the Securities Act. The tender offer is being made to all holders.

Both offers are subject to proration and will expire at 11:59 p.m. ET on Dec. 29. They began on Dec. 1.

As already reported, the company plans to issue for cash a new series of senior debt securities with terms substantially similar to those of the exchange notes, except that they will have a five-year term and will be priced in accordance with general market conditions for debt securities of comparable maturities.

The offers are not conditioned on the completion of this issuance, and the company may elect to fund the cash consideration with cash on hand.

Each offer is subject to the receipt of tenders for at least $250 million of notes in that offer.

The exchange and information agent is D.F. King & Co., Inc. (212 269-5550, 800 628-8536 or drpepper@dfking.com).

Dr Pepper Snapple Group is a Plano, Texas-based producer of flavored beverages.

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