- Altria commences a cash tender offer
for any and all of its 9.95% Notes due 2038 and any and all of its
10.20% Notes due 2039, in connection with which it expects to
record a one-time charge against reported earnings in the third
quarter of 2016.
- Altria also commences an offering of
new senior unsecured debt.
Altria Group, Inc. (Altria) (NYSE:MO) today announced that it is
commencing a cash tender offer for any and all of its senior
unsecured 9.95% Notes due 2038 (the “2038 Notes”) and any and all
of its senior unsecured 10.20% Notes due 2039 (the “2039 Notes”
and, together with the 2038 Notes, the “Notes”). Concurrently,
Altria is commencing an underwritten public offering of new senior
unsecured notes (the “New Notes”). Altria expects these
transactions to reduce its weighted average coupon rate and ongoing
interest expense and extend the weighted average maturity of its
debt. The tender offer will expire at 5:00 p.m., New York City
time, on Monday, September 19, 2016, unless extended or earlier
terminated by Altria (the “Expiration Time”).
The terms and conditions of the tender offer are described in
the Offer to Purchase, dated September 13, 2016 and the related
Letter of Transmittal and Notice of Guaranteed Delivery. The
following table sets forth certain information relating to pricing
for the tender offer.
Title of Securities CUSIP Number
OutstandingPrincipal
Amount
U.S. TreasuryReference
Security
FixedSpread (bps)
BloombergReference Page
9.95% Notes
due 2038
02209SAE3 $682,321,000
2.500% due05/15/2046
167
FIT1 10.20% Notes
due 2039
02209SAH6 $717,708,000
2.500% due05/15/2046
167
FIT1
Upon the terms and subject to the conditions of the tender
offer, all Notes validly tendered and not validly withdrawn at or
prior to the Expiration Time will be accepted for purchase. Altria
reserves the right to terminate or withdraw the tender offer for
the Notes, subject to applicable law. In the event of a termination
or withdrawal of the tender offer, Notes tendered and not accepted
for purchase pursuant to the tender offer will be promptly returned
to the tendering holders.
Holders who wish to be eligible to receive the Total
Consideration (as defined below) must validly tender and not
validly withdraw their Notes at any time at or prior to the
Expiration Time. Tendered Notes may be withdrawn at any time at or
prior to the earlier of (i) the Expiration Time, and (ii) if the
tender offer is extended, the 10th business day after commencement
of the tender offer. Notes subject to the tender offer may also be
validly withdrawn in the event the tender offer has not been
consummated within 60 business days after commencement.
The applicable total consideration per $1,000 principal amount
of each series of Notes (for each series of Notes, the “Total
Consideration”) will be a price (calculated in accordance with
standard market practice) determined as described in the Offer to
Purchase by reference to a yield to maturity equal to the sum of
(i) the yield to maturity for the United States Treasury (“UST”)
Reference Security specified in the table above, calculated based
on the bid-side price of such UST Reference Security as of 11:00
a.m., New York City time, on Monday, September 19, 2016, plus (ii)
the applicable fixed spread specified in the table above.
In addition, holders whose Notes are purchased in the tender
offer will be paid accrued and unpaid interest on their purchased
Notes from the last applicable interest payment date up to, but not
including, the payment date for such purchased Notes. Upon the
terms and subject to the conditions of the tender offer, the
settlement of the tender offer will occur promptly after the
Expiration Time.
The tender offer is subject to the satisfaction or waiver of
certain conditions, as specified in the Offer to Purchase.
Note Issuance
Altria intends to finance the purchase of validly tendered and
accepted Notes with the net proceeds from its concurrent public
offering of the New Notes, cash on hand or a combination of the net
proceeds from the offering of the New Notes and cash on hand.
Nothing contained herein shall constitute an offer of the New
Notes.
The offering of the New Notes is being made only by means of a
prospectus and related prospectus supplement, which may be obtained
by visiting the Securities and Exchange Commission’s website at
www.sec.gov.
Information Relating to the Tender
Offer
Deutsche Bank Securities Inc., Goldman, Sachs & Co.,
Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are
acting as the Dealer Managers for the tender offer. Investors with
questions may contact Deutsche Bank Securities Inc. at (866)
627-0391 (toll-free) or (212) 250-2955 (collect), or Goldman, Sachs
& Co. at (800) 828-3182 (toll-free) or (212) 357-1039
(collect). Global Bondholder Services Corporation is the
Information Agent and Depositary and can be contacted at the
following numbers: banks and brokers can call (212) 430-3774
(collect), and all others can call (866) 470-3900 (toll-free).
Copies of the Offer to Purchase and the related Letter of
Transmittal and Notice of Guaranteed Delivery are available at the
following web address: http://www.gbsc-usa.com/Altria/.
This press release is neither an offer to sell nor a
solicitation of offers to buy any securities. The tender offer is
being made only pursuant to the Offer to Purchase and the related
Letter of Transmittal and Notice of Guaranteed Delivery. The tender
offer is not being made to holders of Notes in any jurisdiction in
which the making or acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such jurisdiction.
None of Altria, the Dealer Managers, the Depositary, the
Information Agent or the trustee for the Notes makes any
recommendation in connection with the tender offer. Please refer to
the Offer to Purchase for a description of offer terms, conditions,
disclaimers and other information applicable to the tender
offer.
2016 Third Quarter
Charge
Altria expects to record a one-time charge against reported
earnings in the third quarter of 2016, reflecting the loss on early
extinguishment of debt related to the tender offer. The charge will
depend upon the pricing and amount of Notes purchased in the tender
offer.
Altria’s Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA
Inc., U.S. Smokeless Tobacco Company LLC, John Middleton Co., Nu
Mark LLC, Ste. Michelle Wine Estates Ltd. (“Ste. Michelle”) and
Philip Morris Capital Corporation. Altria holds a continuing
economic and voting interest in SABMiller plc.
The brand portfolios of Altria’s tobacco operating companies
include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, MarkTen®
and Green Smoke®. Ste. Michelle produces and markets premium wines
sold under various labels, including Chateau Ste. Michelle®,
Columbia Crest®, 14 Hands® and Stag’s Leap Wine Cellars™, and it
imports and markets Antinori®, Champagne Nicolas Feuillatte™,
Torres® and Villa Maria Estate™ products in the United States.
Trademarks and service marks related to Altria referenced in this
release are the property of Altria or its subsidiaries or are used
with permission. More information about Altria is available at
altria.com and on the Altria Investor app.
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