Alphabet extends early premium in exchange offer, gets needed consents

By Susanna Moon

Chicago, April 12 – Alphabet Inc. secured the needed consents to amend Google Inc.’s $1 billion of 3.625% notes due 2021 and $1 billion 3.375% notes due 2024, according to an 8-K filing with the Securities and Exchange Commission.

Investors had tendered for exchange $787,845,000, or 78.78%, of the 3.625% notes and $789,766,000, or 78.98%, of the 3.375% notes as of 5 p.m. ET on April 11, the early tender date.

Alphabet also extended the early participation premium deadline to coincide with expiration of the exchange offers and consent solicitations at 11:59 p.m. ET on April 25.

As announced March 29, Alphabet is offering $1,000 principal amount of new notes and $2.50 of cash in exchange for each $1,000 principal amount of notes.

The exchange value includes an early participation premium, $30 principal amount of Alphabet notes, for each $1,000 of notes tendered for exchange by the early tender date.

Alphabet notes will accrue interest at the same rates and have the same interest payment dates, same redemption terms and same maturity dates as the Google notes for which it is exchanged.

The Alphabet notes will be unsecured general obligations of Alphabet, will rank equally with all other unsecured and unsubordinated debt of Alphabet and will be structurally subordinated to all existing and future liabilities of any of Alphabet’s subsidiaries.

The company is also soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants in the note indenture, including the merger covenant and the reporting covenant, and make some conforming changes to reflect the proposed amendments.

The company said that if the proposed amendments are adopted, the Google notes will be governed by the Google indenture, as amended by the proposed amendments, which will have less restrictive terms and afford reduced protections to the holders of those securities compared to those terms and protections currently in the Google indenture or applicable to the Alphabet notes.

To pass, holders of a majority of each series must consent to the amendments.

The company announced plans for the exchange offers on Feb. 16. At the time, it said the exchange offers would simplify its capital structure, centralize its reporting obligations and give existing holders of Google notes the option to obtain securities issued by Alphabet.

The lead dealer manager is Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057). The co-dealer managers are BofA Merrill Lynch (980 387-3907 or 888 292-0070), Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666) and Wells Fargo Securities, LLC (704 410-4760 or 866 309-6316). The information agent is D.F. King & Co., Inc. (212 269-5550, 877 732-3617 or goog@dfking.com).

Mountain View, Calif.-based Alphabet is the holding company for Google, a provider of online advertising services, and other subsidiaries.

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