Express Scripts gives update in capped offer, upsized for 6.125% notes

By Susanna Moon

Chicago, July 14 – Express Scripts Holding Co. announced the early tender results in the offers for capped amounts of three series of notes.

Express also amended the maximum tender offers to lift the cap for its 6.125% senior notes due 2041 to $310.0 million from $262.5 million, according to a company update.

As of 5 p.m. ET on July 13, the early tender date, investors had tendered the following amounts, with pricing set for 2 p.m. ET on July 14:

• $368,508,000, or 30.71%, of the $1.2 billion of 7.125% senior notes due 2018 issued by Medco Health Solutions, Inc., which has an offer cap of $450 million. Pricing will be set using a spread of 70 bps over the 0.625% Treasury due June 30, 2018;

• $162,557,000, or 32.51%, of the $500 million of 7.25% senior notes due 2019 issued by Express Scripts, Inc., with an offer cap of $187.5 million. Pricing will be set using a spread of 75 bps over the 0.875% Treasury due June 15, 2019; and

• $316,523,000, or 45.22%, of its $700 million of 6.125% senior notes due 2041, with an offer cap of $310 million. Pricing will be set using a spread of 230 bps over the 2.5% Treasury due Feb. 15, 2046.

The hypothetical payment per $1,000 principal amount was set at $1,096.41 for the 7.125% notes, $1,164.51 for the 7.25% notes and $1,231.53 for the 6.125% notes, as noted before.

The total payment includes an early tender premium of $30.00 per $1,000 principal amount that will only be paid to holders who tender by the early deadline. Those who tender after the early deadline will receive the total amount less the early tender premium.

Express Scripts will also pay accrued interest up to but excluding the payment date, which is expected to be July 15 for early tenders and July 28 for final tenders.

The capped offer will continue until 11:59 p.m. ET on July 27.

Any-and-all offer

As previously announced, holders had tendered $1,104,870,000 of its $1.5 billion of 2.65% senior notes due 2017 in the offer to purchase any and all of the notes until 5 p.m. ET on July 6, with settlement set for July 7.

The company launched the tender offer for the 2.65% notes on June 29 alongside the capped offers.

The tendered amount included $43,000 principal amount tendered under guaranteed delivery procedures, with settlement following on July 11.

The total payment was $1,011.30 per $1,000 principal amount, with pricing set at 2 p.m. ET on July 6 using a fixed spread of 35 bps over the 0.625% Treasury due Feb. 15, 2017.

The company had planned to call the remaining 2.65% notes after the offer.

The tender offers are subject to a financing condition.

BofA Merrill Lynch (888 292-0070 or 980 387-3907), Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and Credit Suisse Securities (USA) LLC (800 820-1653 or 212 325-2476) are the lead dealer managers for the tender offers. Global Bondholder Services Corp. (866 470-3900, 212 430-3774 or gbsc-usa.com/Express-Scripts) is the information agent and tender agent.

Express Scripts is a St. Louis-based pharmacy benefit manager.

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