Aflac begins $400 million tender offer for 6.9% notes, 6.45% notes

By Angela McDaniels

Tacoma, Wash., Dec. 5 – Aflac Inc. began a capped tender offer for its 6.9% senior notes due 2039 and 6.45% senior notes due 2040, according to a company news release.

The maximum aggregate purchase price is $400 million, excluding accrued interest.

The 6.9% notes have an acceptance priority level of one, and the 6.45% notes have an acceptance priority level of two.

The early tender date is 5 p.m. ET on Dec. 16, and the tender offer will expire at 11:59 p.m. ET on Jan. 3.

Pricing will be set at 11 a.m. ET on Dec. 19 by reference to a fixed spread of 110 basis points over the yield to maturity of the 2.25% Treasury due Aug. 15, 2046.

The total consideration includes an early tender premium of $50.00 per $1,000 principal amount of notes tendered by the early tender date.

Had pricing been set at 11 a.m. ET on Dec. 2, the total consideration would have been $1,400.08 for the 6.9% notes and $1,339.60 for the 6.45% notes.

The company will also pay accrued interest up to but excluding the applicable settlement date, which is expected to be Dec. 20 for notes tendered by the early tender date and Jan. 4 for notes tendered after the early tender date but prior to the offer expiration.

If the tender offer is fully subscribed as of the early tender date, notes tendered after the early tender date will not be accepted.

Even if the tender offer is not fully subscribed as of the early tender date, subject to the maximum tender amount, notes tendered by the early tender date will be accepted for purchase in priority to notes tendered after the early tender date even if the notes tendered after the early tender date have a higher acceptance priority level than notes tendered prior to the early tender date.

The joint lead dealer managers are Goldman Sachs & Co at (800 828-3182 or 212 357-1452) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760). Mizuho Securities USA Inc. and SMBC Nikko Securities America, Inc. are the co-dealer managers.

The information agent and depositary is D.F. King & Co., Inc. (212 269-5550, 888 887-1266 or aflac@dfking.com).

The Columbus, Ga.-based company provides supplemental health and life insurance.

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