Heinz begins exchange offer for 15.59% Dealer Remarketable Securities

By Angela McDaniels

Tacoma, Wash., July 22 - H.J. Heinz Co. and subsidiary H.J. Heinz Finance Co. have begun an exchange offer for their $800 million of 15.59% Dealer Remarketable Securities due Dec. 1, 2020, according to a company news release.

They are offering 7.125% guaranteed notes due 2039 and cash in exchange for the securities. The new notes will be issued by H.J. Heinz Finance and guaranteed by Heinz.

The cash component will be funded with the proceeds of a private placement of $250 million of the new 7.125% notes. The 7.125% notes issued in the exchange offer will be in addition to the $250 million of notes issued in the placement.

For each $1,000 principal amount of securities exchanged, holders will receive $980 principal amount of new 7.125% notes and a cash amount.

Holders who tender by 5 p.m. ET on Aug. 4 will receive an additional $20 principal amount of 7.125% notes.

The cash amount will be equal to the amount by which the total exchange price for the securities - $1,312.50 per $1,000 principal amount - exceeds the 7.125% notes' issue price as of the pricing date. Accrued interest on the securities will be added to this cash amount, and accrued interest on the 7.125% notes will be subtracted.

The 7.125% notes issue price will be the lesser of $1,000 and an amount based on a fixed spread of 270 basis points over the applicable U.S. Treasury issue that will be calculated at 2 p.m. ET on Aug. 4.

The exchange offer will expire at 11:59 p.m. ET on Aug. 18.

The completion of the exchange offer is subject to a number of conditions including the absence of certain adverse legal and market developments and the successful issuance of the initial $250 million principal amount of 7.125% notes.

Heinz is a Pittsburgh-based food company specializing in ketchup, sauces, meals, soups, snacks and infant nutrition.

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