British American Tobacco gives early results of tender offers, ups cap

By Marisa Wong

Los Angeles, April 29 – British American Tobacco plc announced the early results of the April 15 tender offers to purchase securities issued by wholly owned subsidiaries B.A.T Capital Corp. and B.A.T. International Finance plc.

The subsidiaries had launched concurrent but separate tender offers to purchase the outstanding notes of seven series for an aggregate purchase price (excluding accrued interest) for all series of up to £1 billion in cash.

The offerors increased the maximum aggregate purchase price (excluding interest) for all series to £1.2 billion, according to a Monday press release.

The offerors also announced pricing and proration details for the offers later in the day on Monday.

As of 5 p.m. ET on April 26, the early tender deadline, holders had tendered the following, with the series listed in order of acceptance priority level:

• £385,519,000 of the £650 million outstanding 2.25% guaranteed notes due 2052 (ISIN: XS1488409977) issued by BAT International, all of which was accepted for purchase at £448.83, with pricing based on the 3.75% U.K. Treasury due July 22, 2052 and a fixed spread of 175 basis points;

• £169,682,000 of the £350 million outstanding 4% guaranteed notes due 2055 (ISIN: XS1324911608) issued by BAT International, all of which was accepted fo purchase at £654.39, with pricing based on the 4.25% U.K. Treasury due Dec. 7, 2055 and a fixed spread of 180 bps;

• €160,078,000 €600 million outstanding 2% guaranteed notes due 2045 (ISIN: XS1203860934) issued by BAT International, all of which was accepted for purchase at €700.37, with pricing based on the interpolated mid-swap rate and a fixed spread of 145 bps;

• $687,038,000 of the $1 billion outstanding 3.984% notes due 2050 (ISIN: US05526DBU81) issued by BAT Capital, all of which was accepted for purchase at $697.51, with pricing based on the 4.75% U.S. Treasury due Nov. 15, 2053 and a fixed spread of 160 bps;

• $344,435,000 of the $750 million outstanding 3.734% notes due 2040 (ISIN: US05526DBT19) issued by BAT Capital, all of which was accepted for purchase at $729.26, with pricing based on the 4.5% U.S. Treasury due Feb. 15, 2044 and a fixed spread of 155 bps;

• $1,157,676,000 of the $2.5 billion outstanding 4.54% notes due 2047 (ISIN: US05526DBF15) issued by BAT Capital, $386,193,000 of which was accepted for purchase at $763.50, with pricing based on the 4.5% U.S. Treasury due Feb. 15, 2044 and a fixed spread of 165; and

• $388,247,000 of the $1 billion outstanding 4.758% notes due 2049 (ISIN: US05526DBK00) issued by BAT Capital, none of which was accepted for purchase. Pricing would have been based on the 4.75% U.S. Treasury due Nov. 15, 2053 and a fixed spread of 170 bps.

The total considerations include an early tender premium of £50, €50 or $50 per £1,000, €1,000 or $1,000 principal amount, respectively, payable to holders whose notes are tendered by the early tender deadline and accepted for purchase.

Pricing was set at 10 a.m. ET on April 29.

In addition, the offerors will also pay accrued interest.

In sum, the offerors accepted all of the tendered notes with acceptance priority levels one through five in full without proration, tendered notes with acceptance priority level six with a proration factor of 33.3999% applied and none of the tendered notes with acceptance priority level seven.

Early settlement is expected to occur on May 1 for the dollar and sterling securities and May 2 for the euro securities.

Tenders may no longer be withdrawn.

The offers will expire at 5 p.m. ET on May 13. However, because the aggregate purchase price for all series tendered by the early deadline exceeds the maximum tender amount, the offerors will not accept for purchase any securities tendered after the early deadline.

The tender offers were not conditioned on any minimum amount being tendered.

The offerors said before that they reserve the right to waive any and all conditions to the tender offers, extend or terminate the offers, increase or decrease the maximum tender amount or otherwise amend the offers in any way.

Citigroup Global Markets Ltd. (+44 20 7986 8969, 800 558-3745 or 212 723-6106; liabilitymanagement.europe@citi.com), Merrill Lynch International (+44 20 7996 5420, 888 292-0070 or 980 387-3907; DG.LM-EMEA@bofa.com), NatWest Markets plc (+44 20 7678 5222, 800 231-5380 or 203 897-6166; NWMliabilitymanagement@natwestmarkets.com) and SMBC Nikko Capital Markets Ltd. (+44 20 4507 5043; liability.management@smbcnikko-cm.com) are dealer managers in connection with the tender offers.

The information and tender agent is Global Bondholder Services Corp. (https://www.gbsc-usa.com/bata/; 212 430-3774 for banks and brokers or 855 654-2014; contact@gbsc-usa.com).

British American Tobacco is a London-based international tobacco company.

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