Japan Tobacco announces results of tender offers for three series

Chicago, Sept. 8 – Japan Tobacco Inc. announced results of the tender offers that were launched on Aug. 31 for the company’s $525 million 3.5% guaranteed notes due 2023, $500 million 2.8% senior notes due 2026 and $500 million 3.875% guaranteed notes due 2028, according to a notice on Wednesday.

Standard Chartered Bank was the tender’s offeror. It was offering to purchase any and all of the outstanding 2023 notes (ISIN: XS1883352681) and up to $500 million across the 2026 notes (ISIN: XS1394761073), which were issued by Japan Tobacco, and the 2028 notes (ISIN: XS1883352764), which were issued by JT International Financial Services BV. JT International also issued the 2023 notes.

Standard Chartered received tenders for $297,707,000 of the 2023 notes under the any-and-all offer.

The bank received tenders for $178,678,000 of the 2026 notes and no results were given for the 2028 notes as Standard Chartered will not accept any for purchase.

The bank is accepting all of the 2023 notes and the 2026 notes tendered for purchase.

There had been a warning that the capped tender offers may be “significantly” increased or decreased at the offeror’s discretion, according to the notice.

The tender offers expired at 11 a.m. ET on Sept. 7.

The purchase price of the 2023 and 2026 notes was calculated relative to their first par call dates on Aug. 28, 2023, and Jan. 13, 2026, respectively, and at a purchase spread of Treasuries plus 10 basis points and 20 bps, respectively. The purchase price for the 2023 notes is 106.515, and the purchase price for the 2026 notes is 108.039, based on pricing at around 10 a.m. ET on Aug. 27.

The purchase price for the 2028 notes would have been calculated relative to their first par call date on June 28, 2028 with a spread of 30 bps over the relevant Treasury. The hypothetical purchase price was 114.338.

The purpose of the offers and a proposed issue of new notes was to optimize and extend the company’s debt maturity profile without increasing the group’s total gross debt.

The offer was contingent on a new offering of notes by Japan Tobacco. The company priced $1,025,000,000 of notes on Sept. 2. Settlement is expected for Sept. 14.

Following the offers, the company plans to redeem the remaining 2023 notes relevant to the make-whole redemption price and the remaining 2026 notes according to their relevant price if the capped tender amount is less than $500 million.

The tender settlement date is expected to be Sept. 13.

Merrill Lynch International (+44 20 7996 5420, DG.LM-EMEA@bofa.com) and Standard Chartered Bank (+44 20 7885 5739, liability_management@sc.com) are the dealer managers of the notes, and Morrow Sodali Ltd. is the information and tender agent.

The cigarette maker is based in Tokyo.

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