Ally buys back $950 million of notes due 2020, 2031, lifts offer cap

By Susanna Moon

Chicago, Feb. 25 – Ally Financial Inc. said it accepted tenders for $800 million of its notes due 2020, after lifting the cap by $50 million, and for $150 million of its notes due 2031.

The tally is as of 5 p.m. ET on Feb. 24, the early tender date.

As previously announced, Ally began two separate Dutch auction cash tender offers on Feb. 10 and originally offered to buy up to

• $750 million of its $1,599,998,000 of 8% senior notes due 2020 and $1.45 billion of 7.5% senior guaranteed notes due 2020; and

• $150 million of its $782.54 million of 8% senior notes due 2031 in a separate offer.

The company accepted for purchase early tenders of

• $247,461,000 of the $1,288,865,000 tendered 8% senior notes due 2020 and $247,461,000 of the $1,288,865,000 tendered 7.5% senior notes due 2020, using a proration factor of 29.78%; and

• $150 million of the $338.75 million tendered 8% senior notes 2031, using a proration factor of 17.42%.

Because the amount of notes tendered by the early date exceeds the tender caps, any notes tendered with a bid premium equal to the clearing premium and accepted for purchase Wednesday was subject to proration, according to a company press release. Any notes tendered with a bid premium less than the clearing premium and accepted for purchase was not subject to proration.

In addition, because the tender offers were fully subscribed by the early participation date, holders who tender notes after the early date will not have any of their notes accepted for purchase, unless Ally further increases the tender caps, the press release noted.

Pricing set, other details

The total purchase price for each $1,000 principal amount was set at $1,215 for the 8% notes due 2020, $1,205 for the 7.5% notes and $1,330 for the 8% notes due 2031. The total amount includes $30.00 per $1,000 of notes tendered by the early deadline.

For the 8% senior notes due 2020, the bid range was $1,195 to $1,225 per $1,000 principal amount. For the 7.5% notes the price range was $1,185 to $1,215 per $1,000 principal amount. In the offer for the 8% notes due 2031, the price range was $1,300 to $1,330 per $1,000 principal amount.

Ally will also pay accrued interest up to but excluding the settlement date.

For each offer, Ally previously said it will pay the lowest single price that will enable it to accept sufficient notes to meet the tender cap amount with bids to be prorated if necessary.

Any notes tendered after the early participation date will be deemed to have been tendered at the price already set. They will not be considered for calculating the tender price.

The offers will end at 11:59 p.m. ET on March 10.

Tendered notes may no longer be withdrawn.

Ally expects the early payment date to be Feb. 25 and the final payment date to be March 11.

The offers are not subject to any minimum amount of notes being tendered but are conditioned on the issuance of new debt, which has now been satisfied.

Ally sold $1.25 billion of senior notes on Feb. 10 in tranches due 2018 and 2022, as previously reported.

BofA Merrill Lynch at (888 292-0070 or 980 683-3215), Goldman, Sachs & Co. (800 828-3182 or 212 902-6595) and Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) are the dealer managers.

Global Bondholder Services Corp. at (866 807-2200 or 212 430-3774) is tender agent and information agent.

Ally is a Detroit-based auto finance company.

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