UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2016
REYNOLDS AMERICAN INC.
(Exact Name of Registrant as Specified in Charter)
North Carolina | 1-32258 | 20-0546644 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
401 North Main Street
Winston-Salem, North Carolina 27101
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code 336-741-2000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.02. | Termination of a Material Definitive Agreement. |
The information provided in Item 2.04 of this report is incorporated by reference into this Item 1.02.
Item 2.04. | Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. |
On February 4, 2016, Reynolds American Inc. (RAI) called for redemption the entire $700 million outstanding principal amount of its 6.750% Senior Notes due 2017 (the 2017 Notes) and the entire $250 million outstanding principal amount of its 7.750% Senior Notes due 2018 (the 2018 Notes and together with the 2017 Notes, the Notes). The redemption date is March 5, 2016 and the date upon which the redemption price is expected to be paid to holders of the Notes is March 7, 2016.
The redemption price for each of the two series of Notes called for redemption is equal to the greater of:
| 100% of the principal amount of such series; and |
| the sum of the present values of the remaining scheduled payments of principal and interest on such series, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate (as defined in the Notes to be redeemed) plus 25 basis points with respect to the 2017 Notes and 50 basis points with respect to the 2018 Notes, plus accrued and unpaid interest on the principal amount of such series to the redemption date. |
The 2017 Notes and the 2018 Notes were issued under RAIs indenture dated May 31, 2006, as supplemented. Absent the redemption, the 2017 Notes would have matured on June 15, 2017, and the 2018 Notes would have matured on June 1, 2018.
RAI expects to pay the redemption price with cash on hand.
Item 8.01. | Other Events. |
On February 4, 2016, RAI issued a press release announcing that it has commenced a cash tender offer for the maximum amount of specified series of its outstanding debt that it can purchase for up to $2.8 billion in cash (excluding accrued and unpaid interest to, but not including, the applicable settlement date and excluding related fees and expenses) (the Tender Cap). Pursuant to the tender offer, RAI is offering to purchase, subject to the Tender Cap and other conditions and limitations, its 4.750% Senior Notes due 2042, 3.250% Senior Notes due 2022, 3.750% Senior Notes due 2023, 3.250% Senior Notes due 2020, 4.000% Senior Notes due 2022, 4.450% Senior Notes due 2025 and 4.850% Senior Notes due 2023 (collectively, the Tender Offer Notes). The aggregate principal amount of the Tender Offer Notes currently outstanding is $7,873,689,000. The tender offer is being made exclusively pursuant to an offer to purchase dated February 4, 2016 and related letter of transmittal, which set forth the terms and conditions of the tender offer. A copy of the press release is filed herewith as Exhibit 99.1.
This Current Report on Form 8-K is neither an offer to sell nor a solicitation of offers to buy any securities.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. |
Description | |
99.1 | Press Release of Reynolds American Inc., dated February 4, 2016. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: February 4, 2016
REYNOLDS AMERICAN INC. | ||
By: | /s/ McDara P. Folan, III | |
Name: | McDara P. Folan, III | |
Title: | Senior Vice President, Deputy General Counsel and Secretary |
EXHIBIT INDEX
Exhibit No. |
Description | |
99.1 | Press Release of Reynolds American Inc., dated February 4, 2016. |
Exhibit 99.1
Reynolds American Inc.
P.O. Box 2990
Winston-Salem, NC 27102-2990
Contact: | Investor Relations: Morris Moore (336) 741-3116 |
Media: David Howard (336) 741-3489 |
RAI 2016-06 |
Reynolds American Inc. Announces Cash Tender Offer For Up to $2.8 Billion Aggregate Purchase
Price for Certain of its Outstanding Notes and Redemption of $950 Million Aggregate Principal
Amount of Certain of its Other Outstanding Notes
WINSTON-SALEM, N.C. February 4, 2016 Reynolds American Inc. (NYSE: RAI) announced today that it has commenced a cash tender offer for the maximum amount of specified series of its outstanding debt that it can purchase for up to $2.8 billion in cash (excluding accrued and unpaid interest to, but not including, the applicable settlement date and excluding related fees and expenses) (the Tender Cap). Pursuant to the tender offer, RAI is offering to purchase, subject to the Tender Cap and other conditions and limitations, its 4.750% Senior Notes due 2042, 3.250% Senior Notes due 2022, 3.750% Senior Notes due 2023, 3.250% Senior Notes due 2020, 4.000% Senior Notes due 2022, 4.450% Senior Notes due 2025 and 4.850% Senior Notes due 2023 (collectively, the Notes). The aggregate principal amount of the Notes currently outstanding is $7,873,689,000.
RAI also announced today that it has called for redemption all $700 million outstanding principal amount of its 6.750% Senior Notes due 2017 and all $250 million outstanding principal amount of its 7.750% Senior Notes due 2018. The expected redemption date is March 5, 2016.
The early tender date for the tender offer is 5:00 p.m., New York City time, on February 18, 2016, unless extended (such date and time, as the same may be extended, the Early Tender Date). The expiration date of the tender offer is 11:59 p.m., New York City time, on March 3, 2016, unless extended or earlier terminated (such date and time, as the same may be extended, the Expiration Date). The terms, conditions and limitations of the tender offer are described in the Offer to Purchase dated today.
Holders of Notes must validly tender and not validly withdraw their Notes on or before the Early Tender Date to be eligible to receive the total consideration (as described below). Tendered Notes may only be withdrawn on or before 5:00 p.m., New York City time, on February 18, 2016, unless such withdrawal date is extended (such date and time, as the same may be extended, the Withdrawal Date). Notes tendered after the Withdrawal Date may not be withdrawn.
1
The table below sets forth certain information regarding the Notes and the tender offer.
Title of Security |
CUSIP Nos. | Principal Amount Outstanding |
Acceptance Priority Level |
Reference U.S. Treasury Security |
Bloomberg Reference Page |
Fixed Spread |
||||||||||||
4.750% Senior Notes due 2042 |
761713AW6 | $ | 1,000,000,000 | 1 | 2.875% due August 15, 2045 |
PX1 | 190 bps | |||||||||||
3.250% Senior Notes due 2022 |
761713AX4 | $ | 1,100,000,000 | 2 | 1.375% due January 31, 2021 |
PX1 | 135 bps | |||||||||||
3.750% Senior Notes due 2023 |
|
761713BU9 / 761713BM7 / U8001FAQ8 |
|
$ | 473,689,000 | 3 | 2.250% due November 15, 2025 |
PX1 | 105 bps | |||||||||
3.250% Senior Notes due 2020 |
761713BE5 | $ | 1,250,000,000 | 4 | 1.375% due January 31, 2021 |
PX1 | 85 bps | |||||||||||
4.000% Senior Notes due 2022 |
761713BF2 | $ | 1,000,000,000 | 5 | 1.375% due January 31, 2021 |
PX1 | 125 bps | |||||||||||
4.450% Senior Notes due 2025 |
761713BG0 | $ | 2,500,000,000 | 6 | 2.250% due November 15, 2025 |
PX1 | 140 bps | |||||||||||
4.850% Senior Notes due 2023 |
761713AY2 | $ | 550,000,000 | 7 | 2.250% due November 15, 2025 |
PX1 | 110 bps |
RAI reserves the right, but is not obligated, to increase the Tender Cap. Tenders of the Notes will be accepted only in principal amounts equal to $2,000 and integral multiples of $1,000 in excess thereof.
The total consideration for each $1,000 principal amount of Notes tendered and accepted for payment by RAI pursuant to the tender offer will be determined in the manner described in the Offer to Purchase by reference to a fixed spread specified in the table above for each series of the Notes over the yield based on the bid-side price of the U.S. Treasury Security specified in the table above, as calculated by the lead dealer managers (identified below) for the tender offer at 2:00 p.m., New York City time, on February 19, 2016. Holders of Notes who validly tender their Notes after the Early Tender Date will, if such Notes are accepted by RAI, receive the tender consideration, which is equal to the total consideration minus $30 per $1,000 principal amount of Notes tendered by such holders and accepted for purchase by RAI. Accrued and unpaid interest up to, but excluding, the applicable settlement date will be paid in cash on all validly tendered Notes accepted and purchased by RAI in the tender offer. The consideration for the Notes is expected to be paid by RAI with cash on hand.
Subject to the Tender Cap and except as indicated below, RAI expects to accept for purchase any validly tendered and not validly withdrawn Notes on or before the Early Tender Date in accordance with, and in the order of, the acceptance priority levels set forth in the table above. The initial settlement date is currently expected to occur on February 22, 2016. RAI expects to purchase any remaining Notes that have been validly tendered and not validly withdrawn by the Expiration Date and accepted for purchase, subject to the Tender Cap and the application of the acceptance priority levels and except as indicated below, one business day following the Expiration Date.
All Notes validly tendered and not validly withdrawn on or before the Early Tender Date having a higher acceptance priority level will be accepted before any tendered Notes having a lower acceptance priority level, and all Notes validly tendered after the Early Tender Date having a higher acceptance priority level will be accepted before any Notes validly tendered after the Early Tender Date having a lower acceptance priority level. However, Notes validly tendered and not validly withdrawn on or before the Early Tender Date will be accepted for purchase in priority to other Notes validly tendered after the Early Tender Date even if such Notes validly tendered after the Early Tender Date have a higher acceptance priority level than Notes tendered prior to the Early Tender Date.
2
Notes accepted for purchase in accordance with the terms and conditions of the tender offer may be subject to proration (rounded down to avoid the purchase of Notes in a principal amount other than in integral multiples of $1,000), so that RAI will only accept for purchase Notes in an amount up to the Tender Cap. If purchasing all of the tendered Notes of a series on any settlement date would cause the Tender Cap to be exceeded, the amount of that series of Notes purchased on that settlement date will be prorated based on the aggregate consideration payable for that series of Notes tendered in respect of that settlement date such that the Tender Cap will not be exceeded. Furthermore, if the tender offer is fully subscribed as of the Early Tender Date, holders who validly tender Notes after the Early Tender Date will not have their Notes accepted for purchase.
RAIs obligation to accept for purchase and to pay for Notes validly tendered and not validly withdrawn pursuant to the tender offer is conditioned upon satisfaction of certain conditions, including the condition that RAI have sufficient cash on hand, at each of the Early Tender Date and Expiration Date, to purchase on the applicable settlement date all Notes validly tendered and not validly withdrawn by such dates, and to pay all related fees and expenses in connection with the tender offer. None of RAI, the dealer managers, D.F. King & Co., Inc. or the trustee for the Notes makes any recommendation as to whether holders should tender Notes in response to the tender offer.
RAI has retained Goldman, Sachs & Co., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC to serve as the lead dealer managers for the tender offer and has retained D.F. King & Co., Inc. to serve as tender agent and information agent for the tender offer.
Requests for documents relating to the tender offer may be directed to D.F. King & Co., Inc. by telephone at (212) 269-5550 or toll free at (877) 283-0324, by email at rai@dfking.com or in writing at 48 Wall Street, New York, N.Y. 10005. Questions regarding the tender offer may be directed to Goldman, Sachs & Co. at (800) 828-3182, to Citigroup Global Markets Inc. at (800) 558-3745, to Credit Suisse Securities (USA) LLC at (800) 820-1653 or to J.P. Morgan Securities LLC at (866) 834-4666.
This press release is not a tender offer to purchase or a solicitation of acceptance of a tender offer, which may be made only pursuant to the terms of the Offer to Purchase and the related Letter of Transmittal. 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. In any jurisdiction where the laws require the tender offer to be made by a licensed broker or dealer, the tender offer will be deemed made on behalf of RAI by Goldman, Sachs & Co., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC or J.P. Morgan Securities LLC, or one or more registered brokers or dealers under the laws of such jurisdiction.
Forward Looking Statements
Statements included in this press release that are not historical in nature are forward-looking statements. When used in this press release, forward-looking statements include, without limitation, statements regarding the acceptance of the tendered Notes, the Early Tender Date, expiration and settlement of the tender offer, the satisfaction of conditions to the tender offer, and the timing of any of the foregoing, as well as RAIs expectations, beliefs or intentions that are signified by the words anticipate, believe, estimate, expect, intend, may, objective, outlook, plan, project, possible, potential, should and similar expressions. These statements regarding future events inherently are subject to a variety of risks, contingencies and other uncertainties that could cause actual results to differ materially from those described in or implied by the forward-looking statements. Some of these risks, contingencies and other uncertainties are set forth in the Offer to Purchase related to the tender offer under the headings Certain Significant Consequences and Risks Relating to the Offer and Forward-Looking Statements, in RAIs Annual Report on Form 10-K for the year ended December 31, 2014 under the heading Risk Factors and in RAIs Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015 under the headings Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Financial ConditionCautionary Information Regarding Forward-Looking Statements, as the same may be updated in subsequent RAI reports. RAI disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
3