Ahold sets pricing in tenders for €1 billion equivalent of bonds

By Jennifer Chiou

New York, Oct. 20 - Ahold Finance U.S.A., LLC and Koninklijke Ahold NV said they set pricing in their tenders for €1 billion equivalent of Ahold Finance's outstanding £500 million 6½% guaranteed notes due 2017 and €600 million 5 7/8% guaranteed notes due 2012 and Koninklijke Ahold's €1.5 billion 5 7/8% notes due 2008.

Ahold said it will pay 100.136% for the 6½% notes and 109.864% for its 5 7/8% notes due 2012 while Koninklijke said it will pay 106.732% for its 5 7/8% notes due 2008.

As previously announced, because the offers exceeded the targeted amounts, the companies will repurchase the notes on a pro rata basis.

Ahold said it accepted £250 million of tenders for £282,897,000 of 6½% notes - a pro-ration factor of 0.88371. It also accepted €193,176,000 of 5 7/8% notes due 2012. The company had said it would solicit for up to €330 million of 5 7/8% notes due 2012.

Because of the response, Koninklijke increased its offer for the 5 7/8% notes due 2008 to €436,824,000 from €300 million. The company received tenders for €1,070,288,000 of 5 7/8% notes due 2008 for a pro-ration factor of 0.40814.

The company announced the tender spreads in the offers on Oct. 17. For the 6½% notes the spread is 196 basis points over the 4¾% U.K. Gilt due Sept. 7, 2015, the tight end of the previously tender spread range of 196 basis points to 201 bps; for the 5 7/8% notes due 2012 the spread is 108 basis points over the Bundesrepublik Deutschland 5% note due Jan. 4, 2012, towards the wide end of the range of 104 bps to 109 bps; and for the 5 7/8% notes due 2008 the spread is 52 basis points over the OBL series 142 3% notes due April 11, 2008, at the wide end of the range of 47 bps to 52 bps.

The tender offers ended at 11 a.m. ET on Oct. 19.

Koninklijke said it decreased its outstanding debt by €1 billion for a €935 million cash payment and added it will reduce both its and Ahold Finance's net interest expenses in 2005 and 2006 by €40 million.

BNP Paribas and JP Morgan are lead dealer managers. JP Morgan Chase Bank is tender agent while Barclays Capital and Goldman Sachs are co-dealer managers.

Ahold is a Netherlands-based company in the retail trade and foodservice businesses.

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