Target raises maximum tender to $1.14 billion, accepts 68% of notes

New York, March 27 - Target Corp. increased the maximum payment amount in its maximum tender offer to $1,114,268,003 from $913,268,003 and said it expects to purchase 68% of the tendered amount of first priority notes. The company does not expect to buy any notes with other priority levels.

Apart from the increase in the maximum payment, all terms of the tender remain unchanged.

As of the early tender date of 5 p.m. ET on Wednesday, holders had tendered $1,611,519,000 of notes.

Specifically, holders had tendered:

• $1,126,303,000 of the $2.25 billion of 7% notes due 2038. These notes have acceptance priority level 1. Pricing will be based on a spread of 90 basis points over the 2.75% Treasury due Nov. 15, 2042;

• $90,159,000 of the $550 million of 6.35% debentures due 2035 with priority level 2. Pricing will be based on a spread of 80 bps over the 2.75% Treasury due Nov. 15, 2042;

• $379,360,000 of the $1.25 billion of 6.5% notes due 2037 with priority level 3. Pricing will be based on a spread of 95 basis points over the 2.75% Treasury due Nov. 15, 2042;

• $1,828,000 of the $38.65 million of 9.875% debentures due 2020 with priority level 4. Pricing will be based on a spread of 55 basis points over the 2% Treasury due Feb. 15, 2023;

• $8,995,000 of the $21,628,000 of 8.875% debentures due 2022 with priority level 5. Pricing will be based on a spread of 80 basis points over the 2% Treasury due Feb. 15, 2023;

• $1,189,000 of the $27,715,000 of 9.7% debentures due 2021 with priority level 6. Pricing will be based on a spread of 65 basis points over the 2% Treasury due Feb. 15, 2023;

• $1.8 million of the $40.83 million of 8.8% debentures due 2022 with priority level 7. Pricing will be based on a spread of 80 basis points over the 2% Treasury due Feb. 15, 2023; and

• $1,885,000 of the $16,652,000 of 9% debentures due 2021 with priority level 8. Pricing will be based on a spread of 70 basis points over the 2% Treasury due Feb. 15, 2023.

All tender prices include a $30 per $1,000 early tender payment that will be paid only to those holder who tendered by the early tender date.

Target said the actual amount accepted will depend on whether any further notes are tendered after the early tender date.

Pricing will be set a 2 p.m. ET on March 28.

At its previous announcement on March 21, Target announced the receipt of overall tenders for $209,262,000 of debentures in its separate any and all tender offer covering three series of securities.

Specifically, holders tendered the following:

• $34,521,000, or 20.31%, of the $170 million of 6.75% debentures due 2028 with a total consideration of $1,311.50 per $1,000 principal amount;

• $39,073,000, or 25.22%, of the $154.9 million of 6.65% debentures due 2028 with a total consideration of $1,309.07 per $1,000 principal amount; and

• $135,668,000, or 38.32%, of the $354 million of 7% debentures due 2031 with a total consideration of $1,395.38 per $1,000 principal amount.

The any and all tender offer expired at 11:59 p.m. ET on March 20 and the maximum tender offer will expire at 11:59 p.m. ET on April 10.

As reported, the cap on the maximum tender offer is not on the principal amount of notes purchased but rather on the purchase price. Under the original terms, the maximum payment amount was set at $1.2 billion less the total consideration paid in the any and all tender offers, a figure subsequently increased.

The original maximum aggregate total consideration and late tender offer consideration to be paid in the maximum offer was set at $914,268,003. This figure came as a result of subtracting the $285,731,997 settlement amount for the any and all offer from the $1.2 billion payment cap.

All maximum tender offer notes of a series with a higher acceptance priority level will be accepted for purchase before any tendered notes with a lower acceptance priority level are accepted. If there are enough funds to purchase some, but not all, of a series of notes, the amount of those notes purchased will be on a prorated basis.

The total consideration for each series of notes will be determined using a fixed spread over the yield based on the bid-side price of a reference Treasury security. Pricing was fixed at 2 p.m. ET on March 20 for the any and all tender offers and will be set at 2 p.m. ET on March 28 for the maximum tender offers.

Holders will also receive accrued interest up to but excluding the payment date, which was to be March 21 for the any and all tender offers and April 11 for the maximum tender offers.

The lead dealer managers are Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) or J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811). The tender and information agent is Global Bondholder Services Corp. (866 873-7700 or, for bankers and brokers, 212 430-3774).

Target is a Minneapolis-based retailer. It launched the offers on March 13.

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