International Paper gives pricing, increases cap, extends early deadline for tender offer for five notes series

By Toni Weeks

San Luis Obispo, Calif., May 28 – International Paper Co. said it has increased the tender cap in its tender offer for four series of its notes as well as one series of notes issued by wholly owned subsidiary Temple-Inland, Inc.

The company will now accept tenders for $1 billion of the notes, increased from $750 million.

International Paper is also extending the early tender deadline to 11:59 p.m. ET on June 11 from 5 p.m. ET on May 28. However, the previously announced expiration of withdrawal rights will not be extended, thus previously tendered notes may not be withdrawn as of 11:59 p.m. ET on May 28.

Pricing was determined at 2 p.m. ET on May 28 using the yield of the bid-side price of the reference U.S. Treasury security. The prices per $1,000 principal amount of notes are as follows, with notes listed in order of priority acceptance level:

• $1 million of 7.5% notes due 2021 using the 1.375% Treasury note due April 30, 2020 plus 130 basis points for a tender yield of 2.804% and a total consideration of $1,264.51;

• $903,191,000 of 7.95% notes due 2018 using the 0.75% Treasury note due April 15, 2018 plus 70 bps for a tender yield of 1.646% and a total consideration of $1,184.29;

• $231,096,000 of 6.625% notes due 2018 issued by Temple-Inland using the 0.75% Treasury note due April 15, 2018 plus 60 bps for a tender yield of 1.546% and a total consideration of $1,128.52;

• $424,719,000 of 9.375% notes due 2019 using the 1.375% Treasury note due April 30, 2020 plus 75 bps for a tender yield of 2.254% and a total consideration of $1,128.52; and

• $900 million of 4.75% notes due 2022 using the 2% Treasury note due Feb. 15, 2025 plus 70 bps for a tender yield of 2.836% and a total consideration of $1,115.61.

Each total purchase price includes a $30.00 early tender premium for each $1,000 principal amount of notes tendered by the early date.

Those who tender after the early deadline will receive the total amount less the early premium.

The tender offer will end at 11:59 p.m. ET on June 11.

Holders will also receive accrued interest to but excluding the settlement date of June 12.

As previously noted, the tender offer is conditioned on International Paper securing enough proceeds to fund the offer from a concurrent public offering of senior debt securities by the early tender deadline. International Paper priced $2 billion of bonds on May 14, according to Prospect News.

J.P. Morgan Securities LLC (800 834-4666 or 212 834-4811), BofA Merrill Lynch (888 292-0070 or 980 387-3907), Credit Agricole Securities (USA) Inc. (866 807-6030 or 212 261-7802) and BNP Paribas Securities Corp. are the dealer managers. Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) is the depositary and information agent.

International Paper is a packaging and paper manufacturing company based in Memphis.

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