NORFOLK, Va., April 30, 2020 /PRNewswire/ -- Norfolk Southern
Corporation (the "Company") (NYSE: NSC) announced today the
commencement of offers to certain eligible holders (together, the
"Exchange Offers") of the Company's outstanding debt securities
listed in the table below (together, the "Existing Notes") to
exchange Existing Notes for consideration consisting of cash and up
to $800,000,000 aggregate principal
amount of the Company's new Notes due 2055 (the "New Notes"), the
complete terms of which are set forth in a confidential offering
memorandum, dated today (the "Offering Memorandum"), and the
related letter of transmittal, dated today (together with the
Offering Memorandum, the "Offering Documents").
The table below indicates each series of Existing Notes
included in the Exchange Offers:
Cusip
Numbers
|
Title of
Security
(collectively,
the "Existing
Notes")
|
Principal
Amount
Outstanding
|
Acceptance
Priority
Level(1)
|
Reference
U.S.
Treasury
|
Bloomberg
Reference
Page
|
Fixed
Spread
(bps)
|
Cash
Payment
Percent of
Premium(2)
|
Early
Exchange
Premium(3)(4)
|
|
|
|
|
|
|
|
|
|
655844CB2
|
5.100% Notes
due 2118
|
$800,000,000
|
1
|
2.375% due
November
15, 2049
|
FIT1
|
240
|
0%
|
$30.00
|
655844AK4
|
7.900% Notes
due 2097
|
$225,222,000
|
2
|
2.375% due
November
15, 2049
|
FIT1
|
240
|
0%
|
$30.00
|
655844BD9
|
6.000% Notes
due 2111
|
$121,731,000
|
3
|
2.375% due
November
15, 2049
|
FIT1
|
240
|
0%
|
$30.00
|
655844AV0
|
6.000% Notes
due 2105
|
$184,118,000
|
4
|
2.375% due
November
15, 2049
|
FIT1
|
240
|
0%
|
$30.00
|
655844AF5
|
7.050% Notes
due 2037
|
$178,995,000
|
5
|
2.375% due
November
15, 2049
|
FIT1
|
145
|
0%
|
$30.00
|
655844BR8
|
4.650% Notes
due 2046
|
$600,000,000
|
6
|
2.375% due
November
15, 2049
|
FIT1
|
155
|
0%
|
$30.00
|
655844BN7
|
4.800% Notes
due 2043
|
$291,829,000
|
7
|
2.375% due
November
15, 2049
|
FIT1
|
150
|
0%
|
$30.00
|
655844BH0 /
655844BE7
|
4.837% Notes
due 2041
|
$595,504,000
|
8
|
2.375% due
November
15, 2049
|
FIT1
|
150
|
0%
|
$30.00
|
655844BQ0
|
4.450% Notes
due 2045
|
$500,000,000
|
9
|
2.375% due
November
15, 2049
|
FIT1
|
155
|
0%
|
$30.00
|
655844CC0
|
4.100% Notes
due 2049
|
$400,000,000
|
10
|
2.375% due
November
15, 2049
|
FIT1
|
160
|
0%
|
$30.00
|
655844BY3
|
4.150% Notes
due 2048
|
$700,000,000
|
11
|
2.375% due
November
15, 2049
|
FIT1
|
160
|
0%
|
$30.00
|
_______________________________
(1)
|
All Existing Notes
tendered for exchange in the Exchange Offers on or before the Early
Exchange Date (as defined below) will have priority over any
Existing Notes that are tendered for exchange after the Early
Exchange Date.
|
(2)
|
The "Cash Payment
Percent of Premium" is the percent (as set forth with respect to
each series of Existing Notes in the table above) of the amount by
which the Total Exchange Consideration (as defined below and
calculated at the Pricing Date [as defined below]) exceeds $1,000
per $1,000 principal amount of such Existing Notes.
|
(3)
|
Per $1,000 principal
amount of Existing Notes.
|
(4)
|
Holders who validly
tender Existing Notes after the Early Exchange Date but on or
before the Expiration Date (as defined below) will not be eligible
to receive the "Early Exchange Premium" of $30 principal amount of
New Notes for each $1,000 principal amount of Existing Notes
validly tendered and not validly withdrawn.
|
The aggregate principal amount of New Notes to be issued
pursuant to the Exchange Offers will be subject to a maximum amount
of $800,000,000 aggregate principal
amount (the "New Issue Cap"). In addition, the principal amount of
each series of Existing Notes that is accepted pursuant to the
Exchange Offers will be subject to the "acceptance priority level"
(in numerical priority order) as set forth in the table above and
as further described in the Offering Documents.
All Existing Notes that are tendered for exchange in an
Exchange Offer on or before the Early Exchange Date will have
priority over Existing Notes that are tendered for exchange after
the Early Exchange Date. If the principal amount of Existing Notes
validly tendered on or before the Early Exchange Date constitutes a
principal amount of Existing Notes that, if accepted by the
Company, would result in the Company issuing New Notes having an
aggregate principal amount equal to or in excess of the New Issue
Cap, the Company will not accept any Existing Notes tendered for
exchange after the Early Exchange Date (even if they are of
acceptance priority level 1).
The following is a summary of
certain key elements of the planned Exchange Offers:
- The Exchange Offers will expire at 11:59
p.m., New York City time,
on May 28, 2020, unless extended by
the Company (the "Expiration Date").
- Eligible Holders who validly tender Existing Notes on or prior
to the Early Exchange Date and do not validly withdraw such
tendered Existing Notes at or prior to the Withdrawal Deadline (as
defined below), will receive, for each $1,000 principal amount of Existing Notes
tendered and accepted, a combination of a principal amount of New
Notes and cash with an aggregate value equal to the Total Exchange
Consideration (as defined below) as follows:
-
- an aggregate principal amount of New Notes equal to (x) the
Total Exchange Consideration for such Existing Notes minus
(y) the Cash Component (as defined below); and
- a cash payment equal to the Cash Component.
Eligible Holders who validly
tender Existing Notes after the Early Exchange Date, but on or
prior to the Expiration Date, will receive, for each $1,000 principal amount of Existing Notes
tendered and accepted, a combination of a principal amount of New
Notes and cash with an aggregate value equal to the Exchange
Consideration (as defined below) as follows:
- an aggregate principal amount of New Notes equal to (x) the
Total Exchange Consideration for such Existing Notes minus
(y) the Cash Component and minus (z) the Early Exchange
Premium; and
- a cash payment equal to the Cash Component.
The Total Exchange Consideration
and Exchange Consideration may be adjusted as described in the
Offering Documents. In addition to the Total Exchange Consideration
or Exchange Consideration, as applicable, Eligible Holders with
Existing Notes that are accepted for exchange will receive a cash
payment representing (i) all or a portion of the accrued and unpaid
interest to, but not including, the applicable Settlement Date (as
defined below), and (ii) amounts due in lieu of any fractional
amounts of New Notes, in each case, as further described in the
Offering Documents.
The "Pricing Date" will be
10 a.m., New York City time, on May 14, 2020, unless the Early Exchange Date is
extended, in which case a new Pricing Date may be established with
respect to the Exchange Offers. In the event that the Early
Exchange Date is not extended, the Pricing Date will remain the
same.
The "Total Exchange
Consideration" (calculated at the Pricing Date) for the
Existing Notes validly tendered on or prior to the Early Exchange
Date, and not validly withdrawn at or prior to the Withdrawal
Deadline, is equal to the discounted value (calculated as set forth
in the Offering Documents) on the expected Early Settlement Date of
the remaining payments of principal and interest (excluding accrued
interest) per $1,000 principal amount
of the Existing Notes through the applicable maturity date or par
call date (as applicable) of the Existing Notes, using a yield
equal to the sum of: (x) the bid-side yield on the applicable
Reference U.S. Treasury Security set forth with respect to each
series of Existing Notes in the table above plus (y) the
applicable fixed spread set forth with respect to each series of
Existing Notes in the table above. The Total Exchange Consideration
includes the Early Exchange Premium.
The "Exchange
Consideration" for the Existing Notes validly tendered after
the Early Exchange Date but on or prior to the Expiration Date is
equal to the Total Exchange Consideration minus the
applicable Early Exchange Premium.
The "Cash Component" means
the portion of the Total Exchange Consideration to be paid to
Eligible Holders in cash and is equal to (x) the applicable Cash
Payment Percent of Premium for such series of Existing Notes
multiplied by (y) (i) the applicable Total Exchange
Consideration for such series of Existing Notes minus (ii)
$1,000.
The "Cash Payment Percent of
Premium" is the percent (as set forth with respect to each
series of Existing Notes in the table above) of the amount by which
the Total Exchange Consideration (as calculated at the Pricing
Date) exceeds $1,000 per $1,000 principal amount of such Existing
Notes.
- The Company will pay interest on the New Notes at a rate per
annum equal to the yield, calculated in accordance with standard
market practice, that corresponds to the bid-side price of the
2.375% United States Treasury due November
15, 2049 as of the Pricing Date, as displayed on the
Bloomberg Government Pricing Monitor page FIT1 plus a fixed spread
of 188 basis points.
- Settlement for Existing Notes tendered on or before the Early
Exchange Date and accepted by the Company is expected to be
May 15, 2020, unless extended by the
Company (the "Early Settlement Date"). Settlement for Existing
Notes tendered and accepted after the Early Exchange Date is
expected to be June 1, 2020, unless
extended by the Company (the "Final Settlement Date"). The Early
Settlement Date and the Final Settlement Date are referred together
as the "Settlement Dates" and each a "Settlement Date."
- Eligible holders who validly tender and who do not validly
withdraw their Existing Notes at or prior to 5 p.m., New York
City time, on May 13, 2020,
unless extended by the Company (the "Early Exchange Date"), and
whose tenders are accepted for exchange by the Company, will
receive the Total Exchange Consideration for each $1,000 principal amount of Existing Notes.
- Eligible holders who validly tender Existing Notes after the
Early Exchange Date but on or prior to the Expiration Date, and
whose Existing Notes are accepted for exchange by the Company, will
receive the Exchange Consideration, which is the Total Exchange
Consideration minus the Early Exchange Premium of $30.00 per $1,000
principal amount of Existing Notes tendered and accepted for
exchange.
- The cash payable to each holder whose Existing Notes are
accepted for exchange will be adjusted as applicable by the accrued
and unpaid interest on those Existing Notes and New Notes, to but
not including the applicable Settlement Date.
- Tenders of Existing Notes in the Exchange Offers may be validly
withdrawn at any time at or prior to 5
p.m., New York City time,
on May 13, 2020, unless extended by
the Company (the "Withdrawal Deadline"), but will thereafter be
irrevocable, except in certain limited circumstances where
additional withdrawal rights are required by law.
- Consummation of the Exchange Offers is subject to a number of
conditions, including (i) the issuance of at least $300,000,000 aggregate principal amount of New
Notes, (ii) favorable tax treatment for the Exchange Offers, and
(iii) the absence of certain adverse legal and market
developments.
- The Company will not receive any cash proceeds from the
Exchange Offers.
- Subject to applicable law, the Company may in its absolute
discretion terminate any Exchange Offer for any reason or for no
reason.
If and when issued, the New Notes will not have been registered
under the Securities Act of 1933, as amended (the "Securities
Act"), or any state securities laws. The New Notes may not be
offered or sold in the United
States or to any U.S. persons except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. The Company will enter into a registration
rights agreement with respect to the New Notes. The New Notes will
be unsecured obligations of the Company and will rank pari passu
with all other unsecured and unsubordinated indebtedness of the
Company.
The Exchange Offers are only made, and copies of the documents
relating to the Exchange Offers will only be made available, to a
holder of Existing Notes who has certified in an eligibility letter
certain matters to the Company, including its status as a
"qualified institutional buyer" as defined in Rule 144A under the
Securities Act or who is a person other than a "U.S. person" as
defined in Rule 902 under the Securities Act. Holders of Existing
Notes who desire access to the electronic eligibility form should
contact D.F. King & Co. Inc., the information agent for the
Exchange Offers, at 800-591-6313 (U.S. toll-free), 212-269-5550
(collect), or at nsc@dfking.com. Holders that wish to receive the
Offering Documents can certify eligibility at
www.dfking.com/norfolksouthern.
This news release does not constitute an offer or an invitation
by the Company to participate in the Exchange Offers in any
jurisdiction in which it is unlawful to make such an offer or
solicitation in such jurisdiction.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation's
premier transportation companies. Its Norfolk Southern Railway
Company subsidiary operates approximately 19,500 route miles in 22
states and the District of
Columbia, serves every major container port in the eastern
United States, and provides
efficient connections to other rail carriers. Norfolk Southern is a
major transporter of industrial products, including chemicals,
agriculture, and metals and construction materials. In addition,
the railroad operates the most extensive intermodal network in the
East and is a principal carrier of coal, automobiles, and
automotive parts.
Forward-looking statements
This press release contains forward-looking statements about
Norfolk Southern Corporation, including those related to the
offering of New Notes and whether or not Norfolk Southern
Corporation will consummate the Exchange Offers. Forward-looking
statements may be identified by the use of words like "believe,"
"expect," "anticipate," "estimate," "plan," "consider," "project,"
and similar references to the future. Forward-looking statements
reflect Norfolk Southern's good-faith evaluation of information
available at the time the forward-looking statements were made.
These forward-looking statements are subject to a number of risks
and uncertainties, and our actual results may differ materially
from those projected. Please refer to Norfolk Southern
Corporation's annual and quarterly reports filed with the SEC for a
full discussion of those risks and uncertainties we view as most
important, including the risks and uncertainties related to the
COVID-19 pandemic. Forward-looking statements are not, and should
not be relied upon as, a guarantee of future performance or
results, nor will they necessarily prove to be accurate indications
of the times at or by which any such performance or results will be
achieved. As a result, actual outcomes and results may differ
materially from those expressed in forward-looking statements. We
undertake no obligation to update or revise forward-looking
statements.
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SOURCE Norfolk Southern Corporation