CBS Corporation announced a cash tender for up to $250 million of two outstanding issues of notes due 2012. An early tender premium is being offered for notes tendered by October 18th, with the final deadline set at November 1st.
Shortly after announcing the tender, CBS Corp. also announced that it had priced $600 million in new bonds.
The payment being offered is complicated, since the two issues of notes are tied to the yield of referenced US Treasury securities. The amount to be paid will be calculated by the dealer managers at 2:00 pm on October 18, based on the Treasury securities market price, three hours before the early tender deadline of 5:00 pm. The early tender premium will add $30 for each $1,000 of face value.
The first priority in the tender by CBS Corp. is its 8.625% debentures due 2012, of which $206,991,000 are outstanding. They are linked to the yield of the 1.750% US Treasury note due August 15, 2012.
Second priority will go to buying back the company’s 5.625% senior notes due 2012, of which $533,129,000 are outstanding. They are also linked to the yield of the 1.750% US Treasury note due August 15, 2012.
There is no minimum tender requirement, but the buyback will be capped at $250 million. Payment is expected to occur on November 3rd.
CBS Corporation has retained Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co., Mitsubishi UFJ Securities (USA), Inc., and Wells Fargo Securities, LLC to serve as dealer managers, Deutsche Bank Trust Company Americas to serve as depositary and D.F. King & Co., Inc. to serve as the information agent for the tender offer.