CFE accepts all $877.49 million of notes in capped tender offer

By Mary-Katherine Stinson

Lexington, Ky., Sept. 27 – Mexico’s Comision Federal de Electricidad (CFE) will accept for purchase all the notes tendered in its cash tender offer for four series of notes up to an aggregate purchase price, excluding interest, of up to $1 billion, according to a news release.

CFE reports it will accept all $877,487,000 of notes tendered in the offer, with the results for each series in order of acceptance priority level listed.

The prices paid include an early tender premium of $50 per $1,000 principal amount that will not be paid to holders who tendered their notes after the early tender deadline, 5 p.m. ET on Sept. 11.

The total amounts tendered and accepted were:

• $482,623,000 of the $869,688,000 outstanding 4 7/8% notes due 2024 (Cusip: 200447AD2, P30179AM0) for $947.69 based on the 1/8% U.S. Treasury due Jan. 15, 2024 and a fixed spread of 0 basis points. Of this amount, $2.92 million was tendered after the early deadline;

• $325,714,000 of the $814,968,000 outstanding 4¾% notes due 2027 (Cusip: 200447AF7, P29595AB4) for $921.96 based on the 4 1/8% U.S. Treasury due July 31, 2028 and a fixed spread of 120 bps. Of this amount, $800,000 was tendered after the early deadline;

• $15,971,000 of the $618,308,000 outstanding 6 1/8% notes due 2045 (Cusip: 200447AE0, P30179AR9) for $815.92 based on the 4 3/8% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 280 bps; and

• $53,179,000 of the $563.71 million outstanding 5¾% notes due 2042 (Cusip: 200447AC4, P30179AK4) for $801.47 based on the 4 3/8% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 265 bps.

The 2045 note and 2042 note totals were unchanged from the early settlement date.

Settlement of early-tendered notes was on Sept. 14.

The company also reported that all the conditions that were to be satisfied or waived on or prior to the early tender date have been met.

The company will also pay accrued interest. CFE has also agreed, subject to specified exceptions and limitations, to pay additional interest to participants to cover Mexican withholding taxes on interest payments.

Early tendered notes had priority in acceptance over any notes tendered after the early deadline, regardless of acceptance priority level.

The offer was not conditioned on any minimum amount being tendered.

Tenders could be withdrawn prior to the early tender date.

Pricing was set at 10 a.m. ET on Sept. 12.

The offer expired at 5 p.m. ET on Sept. 26.

Final settlement is expected to be Sept. 28.

BNP Paribas Securities Corp. (dl.us.liability.management@us.bnpparibas.com; 888 210-4358, 212 841-3059), Citigroup Global Markets Inc. (ny.liabilitymanagement@citi.com; 800 558-3745, 212 723-6106), Morgan Stanley & Co. LLC (800 624-1808; 212 761-1057) and SMBC Nikko Securities America, Inc. (liabilitymanagement@smbcnikko-si.com; 888 284-9760, 212 224-5163) are dealer managers for the offer.

The tender agent is Global Bondholder Services Corp. (855 654-2015 or 212 430-3774).

The state-owned electric utility is based in Mexico City.

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