Viacom to spend $1 billion in capped, waterfall tenders for 15 notes

By Wendy Van Sickle

Columbus, Ohio, Nov. 19 – Viacom Inc. is tendering for up to $300 million of its $550 million of 5.625% senior notes due 2019 and for 14 additional series of notes and debentures in a waterfall tender offer, with the purchase amount in that offer capped at $700 million excluding accrued interest.

Pricing will be set using a reference security plus a fixed spread at 11 a.m. on Dec. 4.

For the capped offer for the 5.625% notes, pricing will be based on the 0.875% U.S. Treasury note due Sept. 15, 2019 plus 35 basis points for a total hypothetical purchase price per $1,000 principal amount of $1,019.73.

In the waterfall tender offers, the company is tendering for the following securities for a total hypothetical purchase price per $1,000 principal amount as listed, with the notes listed in order of priority acceptance levels:

• $252,345,000 2.75% senior notes due 2019 with pricing based on the 1.375% U.S. Treasury note due Dec. 15, 2019 plus 35 bps for a total hypothetical purchase price of $996.45;

• $62,837,000 4.5% senior debentures due 2042 with pricing based on the 3% U.S. Treasury note due Aug. 15, 2048 plus 240 bps for a total hypothetical purchase price of $840.00;

• $31,159,000 4.875% senior debentures due 2043 with pricing based on the 3% U.S. Treasury note due Aug. 15, 2048 plus 240 bps for a total hypothetical purchase price of $884.86;

• $284,345,000 4.85% senior debentures due 2034 with pricing based on the 3% U.S. Treasury note due Aug. 15, 2048 plus 210 bps for a total hypothetical purchase price of $935.68;

• $478,993,000 3.45% senior notes due 2026 with pricing based on the 3.125% U.S. Treasury note due Nov. 15, 2028 plus 125 bps for a total hypothetical purchase price of $941.41;

• $103,022,000 2.25% senior notes due 2022 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 110 bps for a total hypothetical purchase price of $948.34;

• $347,623,000 5.25% senior debentures due 2044 with pricing based on the 3% U.S. Treasury note due Aug. 15, 2048 plus 225 bps for a total hypothetical purchase price of $951.94;

• $181.61 million 3.25% senior notes due 2023 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 120 bps for a total hypothetical purchase price of $966.76;

• $195,375,000 3.125% senior notes due 2022 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 115 bps for a total hypothetical purchase price of $969.74;

• $492,139,000 3.875% senior notes due 2024 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 110 bps for a total hypothetical purchase price of $993.83;

• $600 million 3.875% senior notes due 2021 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 75 bps for a total hypothetical purchase price of $1,007.33;

• $1.25 billion 4.25% senior notes due 2023 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 105 bps for a total hypothetical purchase price of $1,012.06;

• $500 million 4.5% senior notes due 2021 with pricing based on the 2.875% U.S. Treasury note due Oct. 31, 2023 plus 80 bps for a total hypothetical purchase price of $1,017.70; and

• $1.25 billion 5.85% senior debentures due 2043 with pricing based on the 3% U.S. Treasury note due Aug. 15, 2048 plus 230 bps for a total hypothetical purchase price of $1,025.19.

Each total purchase price includes an early tender premium of $30.00 per $1,000 principal amount of notes tendered by 5 p.m. ET on Dec. 3, the early tender date.

The hypothetical price was set using the reference yield of the U.S. Treasury security at 11 a.m. ET on Nov. 16, assuming an early settlement date of Dec. 5.

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

The offers will remain open until 11:59 p.m. ET on Dec. 17.

Tenders may be withdrawn through the early tender date.

Settlement is expected to occur on Dec. 5 for early tenders and on Dec. 19 for any remaining tenders.

If the offers are fully subscribed as of the early tender deadline, no more notes will be accepted for purchase in the offer, according to a company announcement.

Citigroup Global Markets Inc. (212 723-6106 or 800-558-3745), Deutsche Bank Securities Inc. (212 250-2955 or 866 627-0391) and RBC Capital Markets, LLC (212 618-7843 or 877 381-2099) are the dealer managers. The information agent and tender agent is Global Bondholder Services Corp. (866 924-2200, 212 430-3774 or contact@gbsc-usa.com).

Viacom is a New York-based media company.

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