R.J. Reynolds Tobacco Holdings, Inc. Announces Pricing of Tender Offer for its 7-3/4% Notes due 2006
July 05 2005 - 5:43PM
PR Newswire (US)
R.J. Reynolds Tobacco Holdings, Inc. Announces Pricing of Tender
Offer for its 7-3/4% Notes due 2006 WINSTON-SALEM, N.C., July 5
/PRNewswire-FirstCall/ -- Reynolds American Inc. (NYSE:RAI),
announced today that its direct wholly owned subsidiary, R.J.
Reynolds Tobacco Holdings, Inc. (RJR), has determined the price to
be paid on its tender offer for any and all of its $500 million
aggregate principal amount of 7-3/4% Notes due 2006 (CUSIP Nos.
76182KAK1, 74960LBK1 and 74960LBL9) (the Notes). The tender offer
and the related consent solicitation to amend the indenture
governing the Notes are described in the Offer to Purchase and
Consent Solicitation Statement dated June 21, 2005 (the Offer to
Purchase). (Logo:
http://www.newscom.com/cgi-bin/prnh/20040720/CLTU061LOGO ) The
total consideration for each $1,000 principal amount of Notes
validly tendered and not validly withdrawn on or prior to 5:00
p.m., New York City time, today, unless such date or time is
extended (the Consent Date), is $1,029.90, plus accrued and unpaid
interest up to, but not including, the initial settlement date. The
total consideration was determined by reference to a fixed spread
of 50 basis points over the yield to maturity of the 2.00% U.S.
Treasury Note due May 15, 2006, based on the bid price for such
security as of 2:00 p.m., New York City time, today. Included in
the total consideration is a consent payment of $30 for each $1,000
in principal amount of the Notes validly tendered, and consents
delivered, on or prior to the Consent Date. Holders who tender
Notes after the Consent Date are not eligible to receive the
consent payment. The consents are being solicited to eliminate
substantially all of the restrictive covenants and one of the
events of default contained in the indenture governing the Notes.
Holders may not tender their Notes without delivering consents or
deliver consents without tendering their Notes. RJR has reserved
the right to terminate, withdraw, amend or extend the Offer to
Purchase in its discretion. RJR intends to finance the payment for
Notes tendered pursuant to the tender offer primarily with the
proceeds from its private offering of $300 million in aggregate
principal amount of 6.500% Secured Notes due 2010 and $200 million
aggregate principal amount of 7.300% Secured Notes due 2015, which
closed on June 29, 2005. The Offer to Purchase will expire at 12:00
midnight, New York City time, on July 19, 2005, unless such date is
extended or earlier terminated by RJR. Citigroup Global Markets
Inc. and J.P. Morgan Securities Inc. are acting as the dealer
managers and solicitation agents for the tender offer and consent
solicitation. Holders of the Notes can obtain copies of the Offer
to Purchase and related materials from Global Bondholder Services
Corporation, the information agent, at (212) 430-3774 or toll free
at (866) 540-1500. Questions regarding the solicitation can be
directed to either dealer manager, Citigroup Global Markets Inc. at
(212) 723-6106 or toll free at (800) 558- 3745, or J.P. Morgan
Securities Inc. at (212) 834-3424 or toll free at (866) 834-4666.
Neither RJR or RAI, nor either dealer manager or the information
agent, makes any recommendations as to whether holders should
tender their Notes pursuant to the tender offer or consent to the
proposed amendments to the indenture governing the Notes, and no
one has been authorized by any of them to make such
recommendations. Holders must make their own decisions as to
whether to consent to the proposed amendments to the indenture and
to tender Notes and, if so, the principal amount of Notes to
tender. This announcement is not an offer to purchase, a
solicitation of an offer to purchase, or a solicitation of consents
with respect to the Notes nor is this announcement an offer to sell
or solicitation of an offer to buy new securities of RJR.
Cautionary Information Regarding Forward-Looking Statements
Statements included in this news release that are not historical in
nature are forward-looking statements. These statements regarding
RAI's future performance and financial results inherently are
subject to a variety of risks and uncertainties, described in the
forward-looking statements. These risks and uncertainties include:
the substantial and increasing regulation and taxation of the
cigarette industry; various legal actions, proceedings and claims
relating to the sale, distribution, manufacture, development,
advertising, marketing and claimed health effects of cigarettes
that are pending or may be instituted against RAI or its
subsidiaries; the substantial payment obligations and limitations
on the advertising and marketing of cigarettes under various
litigation settlement agreements; the continuing decline in volume
in the domestic cigarette industry; competition from other
cigarette manufacturers, including increased promotional activities
and the growth of deep-discount brands; the success or failure of
new product innovations and acquisitions; the responsiveness of
both the trade and consumers to new products and marketing and
promotional programs; the ability to realize the benefits and
synergies arising from the combination of R.J. Reynolds Tobacco
Company and the U.S. cigarette and tobacco business of Brown &
Williamson Tobacco Corporation; any potential costs or savings
associated with realigning the cost structure of RAI and its
subsidiaries; the ability to achieve efficiencies in manufacturing
and distribution operations without negatively affecting sales; the
cost of tobacco leaf and other raw materials and other commodities
used in products; the effect of market conditions on the
performance of pension assets, foreign currency exchange rate risk,
interest rate risk and the return on corporate cash; the rating of
RJR's securities; any adverse impacts from the transition of the
packaging operations formerly conducted by RJR Packaging, LLC, an
indirect wholly owned subsidiary of RJR, to the buyers of RJR
Packaging, LLC's businesses; and the potential existence of
significant deficiencies or material weaknesses in internal
controls over financial reporting that may be identified during the
performance of testing required under Section 404 of the
Sarbanes-Oxley Act of 2002. Due to these uncertainties and risks,
you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
news release. Except as provided by federal securities laws, RAI is
not required to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. http://www.newscom.com/cgi-bin/prnh/20040720/CLTU061LOGO
http://photoarchive.ap.org/ DATASOURCE: Reynolds American Inc.
CONTACT: Investors, Ken Whitehurst, +1-336-741-0951, or Media, Seth
Moskowitz, +1-336-741-7698, both of Reynolds American Inc. Web
site: http://www.rjrt.com/
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