Allergan gives early tender results, lifts offer cap to $2.84 billion

By Susanna Moon

Chicago, May 24 – Allergan plc announced the early tender results in the capped offer to purchase several series of notes, which were oversubscribed, and amended the terms to increase some of the sub-caps.

Allergan said on May 10 that indirect wholly owned subsidiaries Allergan Funding SCS, Allergan Finance LLC, Forest Laboratories, LLC and Allergan, Inc., each as co-offeror with its wholly owned subsidiary Warner Chilcott Ltd., had begun tendering for up to $2 billion principal amount of several series of notes.

The company then amended that cap to $2,843,290,000, along with the sub-caps for three series of notes to $543.29 million for the 4.625% notes due October 2042, up from $400 million; to $700 million for the 4.375% notes due February 2019, up from $420 million; and to $1.3 billion for the 4.75% notes due March 2045, up from $1 billion.

In the tender offers, Warner Chilcott is the co-offeror with Allergan Funding SCS (formerly known as Actavis Funding SCS) for the 4.85% notes due 2044, the 4.55% notes due 2035 and the 4.75% notes due 2045 issued by Allergan Funding SCS; with Allergan Finance LLC (formerly known as Actavis, Inc.) for the 3.25% notes due 2022 and the 4.625% notes due 2042 issued by Allergan Finance LLC; with Forest Laboratories, LLC for the 4.375% notes due 2019 and the 4.875% notes due 2021 issued by Forest Laboratories, LLC (formerly known as Forest Laboratories, Inc.); and with Allergan, Inc. for the 3.375% notes due 2020 issued by Allergan, Inc.

The early tender deadline was 5 p.m. ET on May 23. The tender offers had been set to continue until 11:59 p.m. ET on June 7, but the issuer will accept no more of the tendered notes unless the tender caps are further amended, according to a company update on Wednesday.

The early tender results are as follows, with pricing scheduled for 11 a.m. ET on May 24 using a reference security plus a fixed spread for a hypothetical total purchase price for each $1,000 principal amount and the notes listed in order of priority acceptance levels:

• $560,759,000, or 74.77%, of the $750 million 4.875% notes due February 2021 issued by Forest Labs with tender sub-cap of $300 million and pricing to be set using the 1.875% U.S. Treasury note due April 30, 2022 plus 45 basis points for a hypothetical total purchase price of $1,082.49;

• $543,290,000, or 54.33%, of the $1 billion 4.625% notes due October 2042 issued by Allergan Finance with tender sub-cap of $543.29 million, up from $400 million, and pricing to be set using the 2.875% U.S. Treasury note due Nov. 15, 2046 plus 135 bps for a hypothetical total purchase price of $1,035.27;

• $952,317,000, or 90.70%, of the $1.05 billion 4.375% notes due February 2019 issued by Forest Labs with tender sub-cap of $700 million, up from $420 million, and pricing to be set using the 1.25% U.S. Treasury note due April 30, 2019 plus 50 bps for a hypothetical total purchase price of $1,035.34;

• $1,953,843,000, or 78.15%, of the $2.5 billion 4.75% notes due March 2045 issued by Allergan Funding with tender sub-cap of $1.3 billion, up from $1 billion, and pricing to be set using the 2.875% U.S. Treasury note due Nov. 15, 2046 plus 135 bps for a hypothetical total purchase price of $1,056.87;

• $1,114,974,000, or 74.33%, of the $1.5 billion 4.85% notes due June 2044 issued by Allergan Funding with tender sub-cap of $375 million and pricing to be set using the 2.875% U.S. Treasury note due Nov. 15, 2046 plus 140 bps for a hypothetical total purchase price of $1,063.53;

• $1,458,082,000, or 58.32%, of the $2.5 billion 4.55% notes due March 2035 issued by Allergan Funding with pricing based on the 2.875% U.S. Treasury note due Nov. 15, 2046 plus 130 bps for a hypothetical total purchase price of $1,025.30;

• $227,604,000, or 35.02%, of the $650 million 3.375% notes due September 2020 issued by Allergan, Inc. with pricing based on the 1.5% U.S. Treasury note due April 30, 2020 plus 75 bps for a hypothetical total purchase price of $1,034.00; and

• $909,465,000, or 53.5%, of the $1.7 billion 3.25% notes due October 2022 issued by Allergan Finance with pricing based on the 1.875% U.S. Treasury note due April 30, 2022 plus 90 bps for a hypothetical total purchase price of $1,019.77.

Because the offers were oversubscribed for the 4.875% notes due February 2021, the 4.375% notes due February 2019 and the 4.75% notes due March 2045, the proration rate of about 5.5% for the 4.875% notes, about 73.5% for the 4.375% notes and about 66.5% for the 4.75% notes.

The total purchase price will include an early tender premium of $30.00 for each $1,000 principal amount of notes tendered by the early tender deadline.

The hypothetical total purchase price was set using the U.S. Treasury reference security as of 11 a.m. ET on May 9, assuming an early settlement date of May 30.

Holders also will receive accrued interest up to but excluding the settlement date.

Tendered notes may not be withdrawn after the early deadline.

Allergan Funding SCS said on Wednesday that it expects to satisfy the financing condition with the issue of senior notes on May 26.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057), BofA Merrill Lynch (888 292-0070 or 980 387-3907) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) are the lead dealer managers. Barclays, BNP Paribas Securities Corp., HSBC and Mizuho Securities USA LLC are the co-dealer managers.

Global Bondholder Services Corp. (866 470-4200, 212 430-3774 or gbsc-usa.com/Allergan) is the tender and information agent.

Allergan is an Irvine, Calif.-based multi-specialty health care company.

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