J.C. Penney gets $448 million early tenders for three note series

By Marisa Wong

Madison, Wis., Sept. 23 – J.C. Penney Co., Inc. and wholly owned subsidiary J.C. Penney Corp., Inc. announced the early results of their cash tender offers to purchase up to $300 million of the three outstanding series of securities issued by J.C. Penney Corp.

As of 5 p.m. ET on Sept. 22, the early tender date, holders had tendered about $448 million total principal amount of notes.

On Monday J.C. Penney increased the maximum tender amount of the offers to $325 million from $300 million and added tender caps for the 6 7/8% medium-term notes due 2015 and 7.65% debentures due 2016, according to a press release.

As previously announced, the tender offers are for, 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.

The tender caps for the 6 7/8% notes, 7.65% debentures and 7.95% debentures are $140 million, $120 million and $100 million principal amount, respectively.

As of the early tender date, holders had tendered $138,576,000, or 69.29%, of the 6 7/8% notes, $117,174,000, or 58.6%, of the 7.65% debentures and $192,584,000, or 67.49%, of the 7.95% debentures.

Tenders may no longer be withdrawn.

The securities will be purchased, subject to the tender caps, 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.

Holders who tender their securities at or prior to 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.

The tender offers began on Sept. 9 and will expire at 11:59 p.m. ET on Oct. 6.

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. The Plano, Texas-based department store company plans to use the 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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