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.
RICHMOND, Va.–(BUSINESS WIRE)–$MO–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||
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Notes validly tendered and not validly withdrawn at or prior to the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withdrawn at any time at or prior to the earlier of (i) the Expiration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offer may also be validly withdrawn in the event the tender offer has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.
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 http://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
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 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
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.
Altria Client Services