Union Pacific prices, gives early results of exchange offers for 18 series of notes

By Wendy Van Sickle

Columbus, Ohio, March 22 – Union Pacific Corp. priced and announced early results of exchange offers for 18 series of outstanding notes and debentures for a combination of new notes and cash on Monday, according to a press release.

The company reported receiving total tenders of $1,793,944,000 by the early deadline of 5 p.m. ET on March 19.

The company also increased the cap on one set of notes for 12 series.

As announced on March 8, Union Pacific was offering to exchange 12 series of notes for new notes due 2071 and cash. The company announced Monday it increased the maximum amount of new 2071 notes it would issue to settle that offer to $1,012,201,000 from up to $750 million.

Under the other offer, the company is offering to exchange six series of notes for up to $1 billion of new notes due 2036 and cash. For each offer, holders who tendered their notes prior to the early deadline will receive an early premium of $50 cash per $1,000 principal amount of notes that will not be paid to holders who tender after the early deadline.

Holders will also receive accrued interest.

The offers will expire at 11:59 p.m. ET on April 2.

The new 2036 notes will have an annual interest rate of 2.891%, and the new 2071 notes’ rate will be 3.799%. The coupons were set Monday.

2036 offers

Tender amounts submitted by the early deadline for the following series of existing notes included in the offer for 2036 notes and cash are listed in order of acceptance priority, with the total consideration listed per $1,000 principal amount:

• $444.78 million of the $1.5 billion of 3.95% notes due 2028 (Cusip: 907818EY0), with a maximum acceptance sublimit of $550 million, for $1,000 principal amount of new notes and a cash payment of $137.60 set using a spread of 20 basis points;

• $225,355,000 of the $1 billion of 3.7% notes due 2029 (Cusip: 907818FB9,) with a maximum acceptance sublimit of $400 million, for $1,000 principal amount of new notes and a cash payment of $120.76 set using a spread of 30 bps;

• $5,537,000 of the $160,068,000 of 6.25% debentures due 2034 (Cusip: 907818CU0) for $1,000 principal amount of new notes and a cash payment of $383.25 set using a spread of 105 bps;

• $5.32 million of the $149,687,000 of 5.375% debentures due 2033 (Cusip: 907818CS5) for $1,000 principal amount of new notes and a cash payment of $282.60 set using a spread of 95 bps;

• $13.64 million of the $175,560,000 of 7.125% debentures due 2028 (Cusip: 907818BY3) for $1,000 principal amount of new notes and a cash payment of $310.92 set using a spread of 50 bps; and

• $5,741,000 of the $398,276,000 of 6.625% debentures due 2029 (Cusip: 907818CF3) for $1,000 principal amount of new notes and a cash payment of $308.62 set using a spread of 60 bps.

Pricing was set using the 1.125% U.S. Treasury due Feb. 15, 2031.

Pricing was determined at 11 a.m. ET on March 22.

The new 2036 notes will mature on April 6, 2036 and will be priced using the 1.125% U.S. Treasury due Feb. 15, 2031 plus 120 bps.

2071 offers

The following series of existing notes are included in the offer for 2036 notes and cash with the terms of each exchange offer, listed in order of acceptance priority:

• $50,508,000 of the $76.57 million of 4.8% notes due 2058 (Cusip: 907818EX2) for $1,000 principal amount of new notes and a cash payment of $256.31 set using a spread of 115 bps;

• $3.7 million of the $189,119,000 of 4.821% notes due 2044 (Cusip: 907818DT2) for $1,000 principal amount of new notes and a cash payment of $212.31 set using a spread of 105 bps;

• $421,588,000 of the $600 million of 4.375% notes due 2065 (Cusip: 907818DS4) for $1,000 principal amount of new notes and a cash payment of $158.55 set using a spread of 125 bps;

• $16,064,000 of the $221,179,000 of 4.3% notes due 2042 (Cusip: 907818DL9) for $1,000 principal amount of new notes and a cash payment of $149.21 set using a spread of 90 bps;

• $63,476,000 of the $453,374,000 of 4.5% notes due 2048 (Cusip: 907818EW4) for $1,000 principal amount of new notes and a cash payment of $203.14 set using a spread of 95 bps;

• $25,573,000 of the $212,708,000 of 4.25% notes due 2043 (Cusip: 907818DP0) for $1,000 principal amount of new notes and a cash payment of $145.73 set using a spread of 90 bps;

• $116,111,000 of the $350 million of 4.15% notes due 2045 (Cusip: 907818DZ8) for $1,000 principal amount of new notes and a cash payment of $137.47 set using a spread of 90 bps;

• $50.98 million of the $688,037,000 of 4.3% notes due 2049 (Cusip: 907818FC7) for $1,000 principal amount of new notes and a cash payment of $169.65 set using a spread of 95 bps;

• $94.91 million of the $328,249,000 of 4.375% notes due 2038 (Cusip: 907818EV6) for $1,000 principal amount of new notes and a cash payment of $167.07 set using a spread of 70 bps;

• $95,656,000 of the $499,715,000 of 4.05% notes due 2045 (Cusip: 907818EF1) for $1,000 principal amount of new notes and a cash payment of $110.02 set using a spread of 98 bps;

• $73,635,000 of the $600 million of 4.05% notes due 2046 (Cusip: 907818EJ3) for $1,000 principal amount of new notes and a cash payment of $107.35 set using a spread of 100 bps; and

• $81.37 million of the $500 million of 4% notes due 2047 (Cusip: 907818EN4) for $1,000 principal amount of new notes and a cash payment of $102.01 set using a spread of 100 bps.

Pricing was set using the 1.625% U.S. Treasury due Nov. 15, 2050.

Pricing was determined at 11 a.m. ET on March 22.

The new 2036 notes will mature on April 6, 2071 and will be priced using the 1.625% U.S. Treasury due Nov. 15, 2050 plus 140 bps.

Conditions and details

Noteholders had to tender enough notes to require the issuance of at least $300 million principal amount of new notes of each series, which requirement was met in each case by the early deadline.

D.F. King & Co. (212-269-5550, 800-676-7437 or unp@dfking) is the information and exchange agent.

Union Pacific is an Omaha-based railroad transportation company.

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