J.C. Penney wraps oversubscribed tender offers for three note series

By Susanna Moon

Chicago, Oct. 7 – J.C. Penney Co., Inc. and wholly owned subsidiary J.C. Penney Corp., Inc. announced the results of their cash tender offers for up to $325 million of the three outstanding series of securities issued by J.C. Penney Corp.

Investors had tendered $456,102,000 of notes in the offers that ended at 11:59 p.m. ET on Oct. 6. The offers began on Sept. 9.

J.C. Penney accepted for purchase $327,111,000 of the notes, including all of the 6 7/8% notes and 7.65% notes, according to a press release.

The breakdown for the tendered notes, listed in order of acceptance priority, is as follows:

• $140,258,000 of the $200 million 6 7/8% medium-term notes due 2015 with $140 million tender sub-cap;

• $121,853,000 of the $199,955,000 7.65% debentures due 2016 with $120 million tender sub-cap; and

• $193,991,000 of the $285.35 million 7.95% debentures due 2017 with $100 million tender sub-cap.

The company accepted for purchase $65 million of the 7.95% notes using a proration factor of 33.51%.

As previously announced, the company increased the maximum tender amount of the offers to $325 million from $300 million on Sept. 23 and added tender caps for the 6 7/8% medium-term notes due 2015 and 7.65% debentures due 2016.

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.

The total purchase price consisted of the base payment plus an early tender premium of $30 per $1,000 principal amount of notes tendered by the early date.

Holders who tendered their notes after the early tender date will receive the base payment per $1,000 principal amount of $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 company also will pay accrued interest up to but excluding the settlement date.

None of the tender offers was conditioned on the tender of any minimum principal amount, and the purchase of any series of notes was not conditioned upon the purchase of any other series of notes.

The offers were subject to a financing condition. J.C. Penney Corp., Inc. priced an upsized $400 million issue of non-callable five-year senior notes at par on Sept. 10 to yield 8 1/8%, as previously reported.

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.

The issuer is a Plano, Texas-based department store company.

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