Altria upsizes, gives early results of tender offers for 14 series of notes, sets pricing

By Taylor Fox

New York, Feb. 16 – Altria Group, Inc. announced the pricing of its tender offers for 14 series of senior notes in five pools after earlier in the day disclosing the early results of its tender offers and upsizing the offers, as detailed below, according to a press release.

Pool 1

The tender offer covers all of the pool 1 notes tendered by the early deadline, increased from a cap of $500 million. The following amounts, with pricing, were tendered by the early deadline:

• $794,634,000 of the $1.9 billion 2.85% notes due 2022 (Cusip: 02209SAN3) with pricing based on the 0.125% Treasury note due Jan. 31, 2023 plus 10 basis points for a total consideration of $1,038.75 per $1,000 notes; and

• $132,141,000 of the $350 million 2.95% notes due 2023 (Cusip: 02209SAP8) with pricing based on the 0.125% Treasury note due Jan. 31, 2023 plus 15 bps for a total consideration of $1,058.96 per $1,000 notes.

Pool 2

All of the notes in pool 2 tendered by the early deadline will be accepted, increased from a cap of up to $1 billion. Noteholders tendered:

• $623,769,000 of the $1.4 billion 4% notes due 2024 (Cusip: 02209SAS2) with pricing based on the 0.125% Treasury note due Jan. 15, 2024 plus 25 bps for a total consideration of $1,103.91 per $1,000 notes; and

• $655,486,000 of the $1 billion 3.8% notes due 2024 (Cusip: 02209SBB8) with pricing based on the 0.125% Treasury note due Jan. 15, 2024 plus 25 bps for a total consideration of $1,096.60 per $1,000 notes.

Pool 3

Up to $500 million of the notes in pool 3 will be accepted, an unchanged cap for the group of notes.

In pool 3, noteholders tendered:

• $895,762,000 of the $1.5 billion 4.4% notes due 2026 (Cusip: 02209SBC6) with pricing based on the 0.375% Treasury note due Jan. 31, 2026 plus 45 bps for a total consideration of $1,160.97 per $1,000 notes;

• $201,197,000 of the $500 million 2.625% notes due 2026 (Cusip: 02209SAU7) with pricing based on the 0.375% Treasury note due Jan. 31, 2026 plus 55 bps for a total consideration of $1,080.06 per $1,000 notes; and

• $488.6 million of the $750 million 2.35% notes due 2025 (Cusip: 02209SBH5) with pricing based on the 0.375% Treasury note due Jan. 31, 2026 plus 40 bps for a total consideration of $1,057.65 per $1,000 notes.

Because the cap has been exceeded, Altria will accept the 4.4% notes on a prorated basis and will not accept any tenders of the 2.625% notes due 2026 or the 2.35% notes due 2025.

Pool 4

Up to $1.3 billion, increased from $1.2 billion, of the $3 billion outstanding 4.8% notes due 2029 (Cusip: 02209SBD4) will be accepted for purchase. Noteholders tendered $1,340,853,000 of the notes. Pricing was based on the 0.875% Treasury note due Nov. 15, 2030 plus 90 bps for a total consideration of $1,188.50 per $1,000 notes.

Tendered notes will be accepted on a prorated basis because the cap has been exceeded.

Pool 5

Up to $450 million of pool 5 notes will be accepted for purchase, an unchanged capped amount.

Noteholder tendered the following amounts:

• $64,843,000 of the $241,733,000 9.95% notes due 2038 (Cusip: 02209SAE3) with pricing based on the 1.625% Treasury note due Nov. 15, 2050 plus 235 bps for a total consideration of $1,672.87 per $1,000 notes;

• $18,147,000 of the $225,708,000 10.2% notes due 2039 (Cusip: 02209SAH6) with pricing based on the 1.625% Treasury note due Nov. 15, 2050 plus 235 bps for a total consideration of $1,709.69 per $1,000 notes;

• $379,154,000 of the $500 million 6.2% notes due 2059 (Cusip: 02209SBG7) with pricing based on the 1.625% Treasury note due Nov. 15, 2050 plus 220 bps for a total consideration of $1,356.89 per $1,000 notes;

• $1,030,673,000 of the $2 billion 5.8% notes due 2039 (Cusip: 02209SBE2) with pricing based on the 1.625% Treasury note due Nov. 15, 2050 plus 145 bps for a total consideration of $1,294.34 per $1,000 notes;

• $670,571,000 of the $1.8 billion 5.375% notes due 2044 (Cusip: 02209SAR4) with pricing based on the 1.625% Treasury note due Nov. 15, 2050 plus 175 bps for a total consideration of $1,234.48 per $1,000 notes; and

• $1,176,551,000 of the $2.5 billion 5.95% notes due 2049 (Cusip: 02209SBF9) with pricing based on the 1.625% Treasury note due Nov. 15, 2050 plus 185 bps for a total consideration of $1,337.66 per $1,000 notes.

All of the 9.95% notes due 2038 and the 10.2% notes due 2039 will be accepted for purchase.

The 6.2% notes due 2059 will be accepted on a prorated basis.

The 5.8% notes due 2039, the 5.375% notes due 2044 and the 5.95% notes due 2049 will not be accepted for purchase.

Details

Notes tendered by the 5 p.m. ET on Feb. 12 early tender date will receive the total consideration, plus interest.

The total considerations include a $30 early tender premium.

If holders tender more notes in the tender offers than they expect to be accepted for purchase by Altria based on the maximum amount and/or the maximum amounts and Altria subsequently accepts more than such holders expected of such notes tendered as a result of a change, increase or decrease of the aggregate maximum amount and/or the maximum amounts, such holders will not be able to withdraw any of their previously tendered notes.

The tender offers are not conditioned on any minimum principal amount of notes being tendered but the tender offers are subject to a financing condition and certain other general conditions.

The early tender deadline and withdrawal date was 5 p.m. ET on Feb. 12.

The early settlement date is expected to be Feb. 18.

The offer technically expires at 11:59 p.m. ET on March 1; however, no further notes will be accepted for purchase.

The final settlement date was expected to be March 4.

Global Bondholder Services Corp. (212 430-3774; contact@gbsc-usa.com) is the information agent.

Credit Suisse Securities (USA) LLC (800 820-1653, 212 325-2476), Deutsche Bank Securities Inc. (866 627-0391, 212 250-2955), Morgan Stanley & Co. LLC (800 624-1808, 212 761-1057), Citigroup Global Markets Inc. and Mizuho Securities USA LLC are dealer managers.

Altria is a tobacco company based in Richmond, Va.

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