Zions Bancorporation tenders for $500 million of three note series

By Toni Weeks

San Luis Obispo, Calif., Sept. 15 – Zions Bancorp. began a cash tender offer to purchase up to $500 million principal amount of its outstanding senior notes via two tender offers, according to a press release.

The company will purchase any and all of its outstanding $400 million of 4.5% senior notes due March 27, 2017. It will also purchase in a “waterfall” tender offer up to $500 million, less the principal amount of the any and all notes purchased, of its $198,448,000 of outstanding 4% senior notes due June 20, 2016 and $300 million of outstanding 4.5% senior notes due June 13, 2023.

The total consideration will be determined by reference to a fixed spread over the yield of the applicable reference security. Pricing will be determined at 2 p.m. ET on Sept. 23 for the any and all tender offer and at 2 p.m. ET on Sept. 29 for the waterfall offer.

The reference security and spread for the 4.5% notes will be the 1% Treasury note due Sept. 15, 2017 plus a fixed spread of 57 basis points.

In the waterfall offers, the reference security will be the 0.5% Treasury note due Aug. 31, 2016 plus 40 bps for the 4% notes due 2016 and the 2.375% Treasury note due Aug. 15, 2024 plus 100 bps for the 4.5% senior notes due 2023.

Holders of waterfall notes who validly tender their notes prior to 5 p.m. ET on Sept. 29 will receive the total consideration (if their notes are accepted), which will include an early tender premium of $30.00 per $1,000 of notes. Those who tender after the early tender time will not receive the early tender premium. There is no early tender premium in the any and all tender offer for the 4.5% notes due 2017.

Acceptance of the tendered waterfall notes will be subject to a priority level, which is 1 for the 4% notes due 2016 and 2 for the 4.5% notes due 2023.

The any and all tender offer will expire at 5 p.m. ET on Sept. 23, while the waterfall tender offer will expire at 11:59 p.m. ET on Oct 10.

Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955) and Goldman Sachs & Co. (800 828-3182 or 212 902-5183) are the dealer managers. Global Bondholder Services Corp. (866 470-3800) is the depositary and information agent.

The bank holding company is based in Salt Lake City.

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