By Susanna Moon
Chicago, July 2 – American International Group, Inc. announced the results of the any and all tender offers and gave an early tender update and pricing for the capped offers.
The company is tendering for 26 series of notes of AIG and subsidiary AIG Life Holdings, Inc.
The any and all tender offers ended at 5 p.m. ET on July 1, with settlement set for July 7.
The breakdown for the tendered notes and accepted amounts in the any and all offer is as follows
• ¥200 million, or 10%, of ¥2 billion 2.275% fixed-rate notes due Aug. 8, 2016 at a price of ¥1,027.50;
• ¥100 million, or 33.3%, of ¥300 million 2.275% fixed-rate notes due Aug. 8, 2016 at a price of ¥1,027.50;
• Ps. 7 million, or 2.6%, of Ps. 265.1 million 8.59% fixed-rate notes due Sept. 15, 2016 at a price of Ps. 1,061.25;
• None of the ¥20 billion fixed-rate notes due Oct. 24, 2016 at a price of ¥1,051.25;
• CHF 9.1 million, or 17.1%, of CHF 53 million 2.75% notes due 2016 at a price of CHF 1,057.50;
• Ps. 52 million, or 6.9%, Ps. 752 million 7.98% fixed-rate notes due June 15, 2017 at a price of Ps. 1,075.00;
• CHF 16 million, or 46.3%, of CHF 34.5 million 3.375% notes due 2017 at a price of CHF 1,086.25;
• None of the ¥20 billion fixed-rate notes due Nov. 22, 2017 at a price of ¥1,065.00;
• None of the ¥20 billion fixed-rate notes due April 24, 2018 at a price of ¥1,080.00;
• None of the ¥20 billion fixed-rate notes due Aug. 23, 2018 at a price of ¥1,080.00;
• $65.1 million, or 26.7%, of the $243.7 million 5.45% medium-term notes, series MP, due May 18, 2017 at a price of $1,076.62; and
• €39.6 million, or 10.7%, its €370.2 million 5% notes due June 26, 2017 at a price of €1,092.15.
For the last two series, pricing was set at 10 a.m. ET on July 1 using a reference security and a fixed yield as follows:
• The 5.45% notes was priced using the yield of the 0.625% Treasury due May 31, 2017 plus a spread of 60 bps for a reference yield of 0.676%; and
• The 5% notes priced using the June 2017 interpolated swap rate plus a spread of 18 bps for a reference yield of 0.121%.
Holders will also receive a cash payment for accrued interest up to but excluding the payment date.
Maximum tender offer
In the maximum offer, AIG is now offering to purchase up to $3.3 billion equivalent principal amount of notes, up from $3 billion, according to a separate company press release.
Assuming no more notes are tendered after the early deadline, AIG said it intends to accept for purchase all notes tendered and not withdrawn prior to 5 p.m. ET on July 1, the early tender date.
The tender offer is set to end at 11:59 p.m. ET on July 16, with payment following on July 20. Tendered notes may no longer be withdrawn as of the early deadline.
The breakdown for the tendered amounts as of the early tender deadline is as follows, with the notes listed in order of priority acceptance level:
• $1,301,900,000, or 54%, of the $2,411,000,000 5.85% medium-term notes, series G, due Jan. 16, 2018;
• $542.8 million, or 43.4%, of the $1,250,900,000 6.4% notes due Dec. 15, 2020;
• $361.5 million, or 36.2%, of the $1 billion 3.375% notes due Aug. 15, 2020;
• €600,000, or 4.4%, of the €13.5 million 8% series A-7 junior subordinated debentures due May 22, 2018;
• None of the £5.6 million 8.625% series A-8 junior subordinated debentures due May 22, 2018;
• $337 million, or 52.2%, of the $645.6 million 5.60% medium-term notes, series G, due Oct. 18, 2016;
• €108 million, or 14.4%, of the €750 million 4.375% notes due April 26, 2016;
• £73.5 million, or 45.5%, of the £161.7 million 5.75% series A-2 junior subordinated debentures due March 15, 2017;
• €143.6 million, or 46.9%, of the €306.2 million 4.875% series A-3 junior subordinated debentures due March 15, 2017;
• £281.4 million, or 63.3%, of the £281.4 million 6.765% sterling notes due Nov. 15, 2017;
• €20.6 million, or 33.4%, of the €61.8 million 6.797% euro notes due Nov. 15, 2017;
• None of the $116.4 million 8.5% junior subordinated debentures due July 1, 2030 issued by AIG Life Holdings;
• None of the $78.9 million 7.57% junior subordinated deferrable interest debentures, series A, due Dec. 1, 2045 issued by AIG Life Holdings; and
• None of the $227.3 million 8.125% junior subordinated deferrable interest debentures, series B, due March 15, 2046 issued by AIG Life Holdings.
If the capped tender offer is oversubscribed, AIG will accept debt securities in order of acceptance priority level. If there are enough funds to purchase some, but not all, of the tendered debt securities at any acceptance priority level, AIG will accept for payment those tendered debt securities on a prorated basis.
Pricing set
The company will pay €1,032.40 per €1,000 principal amount of 4.375% notes due 2016, which includes an early participation amount of €50 for each €1,000 principal amount tendered by the early participation date.
For the remaining euro-denominated securities, pricing was calculated on the basis of the rates payable on certain reference swaps at 10 a.m. ET on the business day following the early participation date plus a fixed spread.
For the dollar-denominated securities, the purchase price was calculated on the basis of the yield to the applicable call or maturity date of the applicable reference security at 10 a.m. ET on the business day following the early participation date plus a fixed spread.
For the sterling-denominated securities, the purchase price was calculated on the basis of the yield to the applicable call or maturity date of the applicable reference security at 10 a.m. ET on the business day following the early participation date plus a fixed spread.
The total purchase price for each series is laid out in the table below, as announced in a third press release.
The reference yield was 1.001% for the 5.85% notes, 1.633% for the 6.4% notes, 1.633% for the 3.375% notes, 0.203% for the 8% debentures, 0.831% for the 8.625% debentures, 0.633% for the 5.6% notes, 0.597% for the 5.75% debentures, 0.103% for the 4.875% debentures, 0.781% for the 6.765% notes, 0.153% for the 6.797% notes, 2.384% for the 8½% debentures, 3.205% for the 7.57% debentures and 3.205% for the 8⅛% debentures.
The company will also pay accrued interest up to but excluding the purchase date.
In each case, the total purchase price will include an early participation amount equal to 5% of par for debt securities tendered by the early participation date.
The completion of the tender offers was subject to a number of conditions. For the maximum tender offer, these included the condition that the company issue debt securities providing proceeds at least equal to a material portion, in AIG’s judgment, of the principal amount of debt securities accepted in the tender offer. The tender offers are not cross-conditioned.
The dealer managers are Barclays Bank plc (44 (0) 207 773 8990), Barclays Capital Inc. (800 438-3242 or 212 528-7581), Credit Suisse Securities (Europe) Ltd. (+44 (0) 207 888 5564) and Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-2147). The information agent and depositary is Global Bondholder Services Corp. (212 430-3774, 866 924-2200, +001 212 430-3774 or aig@gbsc-usa.com).
AIG is an insurance company based in New York.
| Notes | Reference security | Fixed spread | Total price
|
| 5.85% notes | 1.125% Treasury due June 15, 2018 | 55 bps | $1,104.56
|
| 6.4% notes | 1.5% Treasury due May 31, 2020 | 100 bps | $1,188.52
|
| 3.375% notes | 1.5% Treasury due May 31, 2020 | 95 bps | $1,037.39
|
| 8% debentures | May 2018 interpolated swap rate | 215 bps | €1,153.21
|
| 8.625% debentures | 5% U.K. Treasury due March 7, 2018 | 230 bps | £1,148.10
|
| 5.6% notes | 0.625% Treasury due May 31, 2017 | 40 bps | $1,056.31
|
| 5.75% debentures | 1.75% U.K. Treasury due Jan. 22, 2017 | 215 bps | £1,048.22
|
| 4.875% debentures | March 2017 interpolated swap rate | 210 bps | €1,042.79
|
| 6.765% notes | 1% U.K. Treasury due Sept. 7, 2017 | 75 bps | £1,118.85
|
| 6.797% notes | November 2017 interpolated swap rate | 50 bps | €1,141.16
|
| 8.5% debentures | 2.125% Treasury due May 15, 2025 | 280 bps | $1,341.95
|
| 7.57% debentures | 2.5% Treasury due Feb. 15, 2045 | 265 bps | $1,242.02
|
| 8.125% debentures | 2.5% Treasury due Feb. 15, 2045 | 265 bps | $1,321.47
|
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