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Ahold to buy back up to €1 billion equivalent of bonds
By Jennifer Chiou
New York, Oct. 11 - Ahold Finance U.S.A., LLC and Koninklijke Ahold NV announced offers to repurchase up to €1 billion equivalent of Ahold Finance's outstanding £500 million 6½% guaranteed notes due 2017 and €600 million 5 7/8% guaranteed notes due 2012 and Koninklijke Ahold's €1.5 billion 5 7/8% notes due 2008.
The companies are soliciting for up to £250 million of 6½% notes, up to €330 million 5 7/8% notes due 2012 and up to €300 million notes due 2008, unless increased.
If Ahold Finance does not redeem its targeted amounts of 6½% notes and 5 7/8% notes due 2012, Koninklijke will increase its offer for €300 million of 5 7/8% notes due 2008. If the offers exceed the targeted amounts, the companies will repurchase the notes on a pro rata basis.
Ahold said it will base its purchase price for the 6½% notes on the 4¾% U.K. Gilt due Sept. 7, 2015 and a tender spread range between 196 basis points and 201 bps; the 5 7/8% notes due 2012 on the Bundesrepublik Deutschland 5% note due Jan. 4, 2012 and a range between 104 bps and 109 bps; and for the 5 7/8% notes due 2008 on the OBL series 142 3% notes due April 11, 2008 and a spread between 47 bps and 52 bps.
Pricing will be set at 5 a.m. ET on Oct. 20.
The offer ends at 10 a.m. ET on Oct. 19.
Koninklijke seeks to consolidate its outstanding debt and reduce both its and Ahold Finance's net interest expenses.
BNP Paribas and JP Morgan are lead dealer managers. JP Morgan Chase Bank is tender agent while Barclays Capital and Goldman Sachs are co-dealer managers.
Ahold is a Netherlands-based company in the retail trade and foodservice businesses.
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