Eastman Chemical sees tenders of $857 million in oversubscribed offer

By Wendy Van Sickle

Columbus, Ohio, Nov. 16 – Eastman Chemical Co. said it received valid tenders of about $857 million of notes by the early deadline in its tender offer for up to $400 million of its notes.

The company also announced it will increase the tender caps for two series of its securities. The cap for its 7.625% debentures due 2024 was lifted to $10,714,000 from $10 million, and the cap applicable for its 4.5% notes due 2021 to $64,963,000 from $50 million.

The tender offer began Oct. 31.

By the early deadline of 5 p.m. ET on Nov. 15, pushed from 5 p.m. ET on Nov. 14 originally, the company had received the following valid tenders:

• $10,714,000 of its $53,901,000 of 7.625% debentures due 2024, with a tender cap of $10,714,000, increased from $10 million;

• $27,529,000 of its $223,396,000 of 7.6% debentures due 2027, with a tender cap of $50 million;

• $46,794,000 of its $244,421,000 of 7.25% debentures due 2024, with a tender cap of $50 million;

• $69,769,000 of its $250 million of 4.5% notes due 2021, with a tender cap of $64,963,000, increased from $50 million;

• $292,272,000 of its $900 million of 3.6% notes due 2022 with a tender cap of $150 million; and

• $409,876,000 of its $800 million of 3.8% notes due 2025 with a tender cap of $100 million.

The notes are listed in order of acceptance priority level.

Because the overall tender cap and the caps for some series of notes were exceeded, the notes will be purchased subject to the acceptance priority levels and subject to proration.

The offer was scheduled to expire at midnight ET on Nov. 29, but the issuer does not expect to accept any additional tenders.

Pricing was to be set at 2 p.m. ET on Nov. 16 – extended from 2 p.m. ET on Nov. 15 – using the yield to maturity of a reference Treasury security plus a fixed spread.

The reference Treasury is the 1.5% Treasury due Aug. 15, 2026 for the 7.625% debentures, 7.6% debentures, 7.25% debentures and 3.8% notes and the 1.25% Treasury due Oct. 31, 2021 for the 4.5% notes and 3.6% notes.

The fixed spread is 90 bps for the 7.625% debentures, 110 bps for the 7.6% debentures, 85 bps for the 7.25% debentures, 80 bps for the 4.5% notes, 100 bps for the 3.6% notes and 115 bps for the 3.8% notes.

The total consideration for each series of notes will include an early tender premium of $30 per $1,000 principal amount of notes.

Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be Nov. 21.

The tender offer is conditioned on the completion of an offering of new debt securities.

The dealer manager is Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106). The information agent and depositary is Global Bondholder Services Corp. (212 430-3774, 866 794-2200, 212 430-3774 or contact@gbsc-usa.com).

Eastman Chemical is a specialty chemical company based in Kingsport, Tenn.

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