Reynolds American adds notes series, sets expiration in additional exchange for R.J. Reynolds notes

By Jennifer Chiou

New York, Nov. 8 - Reynolds American Inc. announced a 5 p.m. ET on Dec. 7 expiration for its additional exchange offer for subsidiary R.J. Reynolds Tobacco Holdings, Inc.'s $14.269 million of 7 7/8% notes due 2009, $236.449 million of 6½% notes due 2007, $82.073 million of 7¼% notes due 2012, $0.555 million of 7.3% notes due 2015 and $63.551 million of 6½% notes due 2010, according to a 424B3 filing with the Securities and Exchange Commission.

The company announced the offer on Oct. 25.

As previously reported, the new exchange offer is directed at R.J. Reynolds noteholders that were not eligible to participate in the prior exchange offer. It is also open to other noteholders that did not participate in the previous offer.

The prior exchange was conditioned on the closing of Reynolds American's previously announced agreement to acquire a to-be-formed holding company that will own Conwood Co., LP, Conwood Sales Co., LP, Rosswil LLC and Scott Tobacco LLC.

Holders who elected to exchange their securities will receive the same amount of Reynolds American notes with identical interest rates and maturities.

As previously announced, the notes to be issued by Reynolds American will be jointly and unconditionally guaranteed by Reynolds American and its domestic subsidiaries, other than R.J. Reynolds.

The new notes will be secured by Reynolds American principal property and by the assignment of the company's security interest in indirect subsidiary R.J. Reynolds Tobacco Co. stock. The company added that the security for the notes may be released under certain circumstances.

On June 19, Reynolds American said it received tenders from holders of a total of $1.29 billion notes in the exchange offer for up to the $1.45 billion of notes.

In April, Standard & Poor's placed R.J. Reynolds' note ratings on negative watch after priority obligations ahead of the securities increased as a result of proposed senior secured credit facilities at Reynolds American.

The company is a Winston-Salem, N.C.-based manufacturer and marketer of cigarettes and other tobacco products.

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