J.C. Penney begins tender offers for up to $300 million of three series

By Marisa Wong

Madison, Wis., Sept. 9 – J.C. Penney Co., Inc. and wholly owned subsidiary J.C. Penney Corp., Inc. began cash tender offers to purchase up to $300 million of the three outstanding series of securities issued by J.C. Penney Corp.

Those securities are, listed in order of acceptance priority, the $200 million 6 7/8% medium-term notes due 2015, $199,955,000 7.65% debentures due 2016 and $285.35 million 7.95% debentures due 2017.

With respect to the 7.95% debentures, the company is only offering to purchase up to $100 million principal amount.

The tender offers began on Tuesday and will expire at 11:59 p.m. ET on Oct. 6.

Holders who tender their securities at or prior to 5 p.m. ET on Sept. 22, the early tender date, will be eligible to receive the total consideration, which is equal to the base consideration plus an early tender premium of $30 per $1,000 principal amount, together with accrued interest up to, but not including, the applicable settlement date.

Holders who tender their securities after the early tender date but at or prior to the expiration date will only be eligible to receive the base consideration plus accrued interest.

The base consideration per $1,000 principal amount is $1,037.50 for the 6 7/8% notes, $1,075 for the 7.65% notes and $1,067.50 for the 7.95% notes.

Tenders may be withdrawn at or prior to, but not after, 5 p.m. ET on Sept. 22.

If the total amount of securities tendered by the expiration time exceeds the maximum tender amount, the securities will be purchased, subject to the tender cap in the case of the 7.95% debentures, by acceptance priority level.

If there are sufficient remaining funds to purchase some, but not all, of the securities of a particular series, the amount purchased will be prorated.

None of the tender offers is conditioned upon the tender of any minimum principal amount, and the purchase of securities of any series is not conditioned upon the purchase of any other series of securities.

The offers are, however, subject to a financing condition. J.C. Penney plans to use proceeds from a concurrent debt financing to fund the tender offers.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) is the dealer manager for the tender offers. D.F. King & Co., Inc. (212 269-5550 or 800 697-6975) is the tender and information agent.

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