By Angela McDaniels
Tacoma, Wash., July 1 – Target Corp. determined the prices it will pay in its tender offers for six series of notes or debentures, according to a company news release.
The company will purchase up to $1 billion in aggregate purchase price of the following outstanding securities, which are listed in order of acceptance priority:
• $1,489,254,000 7% notes due 2038;
• $1.25 billion 6.5% notes due 2037;
• $550 million 6.35% debentures due 2032;
• $218,332,000 7% debentures due 2031;
• $115,827,000 6.65% debentures due 2028; and
• $135,479,000 6.75% debentures due 2028.
The total considerations per $1,000 principal amount of notes are noted in the table below. In each case, they include an early tender payment of $30 for each note tendered by 5 p.m. ET on June 30, the early tender date.
Holders will also receive accrued interest up to but excluding the payment date, which is expected to be July 16.
The total consideration for each $1,000 of notes was calculated using a fixed spread specified for each series plus the yield based on the bid-side price of an applicable U.S. Treasury security, as listed in the table below, as of 2 p.m. ET on July 1.
If any notes are tendered making the applicable payment for those notes exceed the maximum payment amount, the notes will be purchased in accordance with the acceptance priority levels. All notes of a series having a higher acceptance priority level will be accepted for purchase before any tendered notes having a lower acceptance priority level are accepted.
If there are sufficient remaining funds to purchase some but not all of the notes of a series, the notes will be subject to proration.
Target said it may choose to increase or decrease the tender cap.
The tender offers began June 17 and will expire at 11:59 p.m. ET on July 15.
As of the early tender date, holders had tendered $618,761,000, or 41.55%, of the 7% notes; $565,934,000, or 45.27%, of the 6.5% notes; $141,579,000, or 25.74%, of the 6.35% debentures; $2.77 million, or 1.27%, of the 7% debentures; $23,666,000, or 20.43%, of the 6.65% debentures; and $14,523,000, or 10.72%, of the 6.75% debentures.
The tender offer is conditioned on, among other things, a new notes offering. Concurrently with the tender offers, Target plans to issue new notes through an underwritten public offering. The company expects to use proceeds from the new notes to pay for notes tendered in the tender offers and for general corporate purposes.
Barclays (800 438-3242 or 212 528-7581), BofA Merrill Lynch (888 292-0070 or 980 387-3907) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) are the dealer managers for the tender offers. Global Bondholder Services Corp. (866 807-2200, bankers and brokers can call 212 430-3774) is the tender and information agent.
The discount merchandise chain is based in Minneapolis.
Pricing
| Notes | Spread | Reference Treasury | Hypothetical consideration
|
| 7% notes due 2038 | 95 bps | 3.625% due Feb. 15, 2044 | $1,389.79
|
| 6.5% notes due 2037 | 95 bps | 3.625% due Feb. 15, 2044 | $1,314.53
|
| 6.35% debentures due 2032 | 75 bps | 3.625% due Feb. 15, 2044 | $1,281.77
|
| 7% debentures due 2031 | 75 bps | 3.625% due Feb. 15, 2044 | $1,346.86
|
| 6.65% debentures due 2028 | 140 bps 2.5% due May 15, 2024 | $1,286.96
|
| 6.75% debentures due 2028 | 135 bps 2.5% due May 15, 2024 | $1,294.37
|
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