Prudential Financial, Inc. (the “Company”) (NYSE: PRU) announced
today, among other things, the pricing terms of its offers to
certain eligible holders (together, the “Exchange Offers”) of the
Company’s Pool 1 Existing Notes and Pool 2 Existing Notes listed in
the tables below (collectively, the “Existing Notes”) to exchange
Pool 1 Existing Notes for consideration consisting of the Company’s
3.905% Notes due 2047 (the “New 2047 Notes”) and to exchange Pool 2
Existing Notes for consideration consisting of the Company’s 3.935%
Notes due 2049 (the “New 2049 Notes”), the complete terms and
conditions of which were set forth in an offering memorandum, dated
November 21, 2017 (the “Offering Memorandum”), and the related
letter of transmittal, dated November 21, 2017 (together with the
Offering Memorandum, the “Offering Documents”). Capitalized terms
not defined herein shall have the meanings ascribed to them in the
Offering Memorandum.
The Company has also elected to increase the aggregate principal
amount of New 2047 Notes to be issued in the Pool 1 Offers from
$650,000,000 to $895,778,000 (as amended, the “2047 Notes Cap”) and
to increase the aggregate principal amount of New 2049 Notes to be
issued in the Pool 2 Offers from $650,000,000 to $1,039,497,000 (as
amended, the “2049 Notes Cap”). As of 5:00 p.m., New York City
time, on December 5, 2017 (the “Early Participation Date”), the
Exchange Offers were over-subscribed, and the Company elected to
accept for exchange all Existing Notes validly tendered and not
validly withdrawn in the Exchange Offers as of the Early
Participation Date, subject to applicable caps, on December 7,
2017, or as soon as practicable thereafter (the “Early Settlement
Date”), if all conditions to the Exchange Offers have been or
concurrently are satisfied or waived by the Company. Since the Pool
1 Existing Notes tendered as of the Early Participation Date equals
the 2047 Notes Cap and the Pool 2 Existing Notes tendered as of the
Early Participation Date equals the 2049 Notes Cap, no additional
Existing Notes will be accepted for exchange pursuant to the
Exchange Offers.
The aggregate principal amount, fixed spread and interest rate
of each series of New Notes expected to be issued by the Company
are set forth in the table below:
Title ofSecurity
Aggregate Principal
AmountExpected to be Issued
Fixed Spread (bps)
Interest Rate(1) 3.905% Notes due 2047
$895,778,000 120 3.905% 3.935%
Notes due 2049 $1,039,497,000 123 3.935%
____________
(1) The interest rate reflects the bid-side yield on the
Reference UST Security plus the applicable fixed spread, calculated
in accordance with the procedures set forth in the Offering
Documents. The Reference UST Security refers to the 2.750% U.S.
Treasury Notes due August 15, 2047 (the “Reference UST Security”),
which had a bid-side yield of 2.705% as of the Pricing Time of the
Exchange Offers.
The table below identifies the aggregate principal amount of
each series of Pool 1 Existing Notes validly tendered (and not
validly withdrawn) in the Pool 1 Offers as of the Early
Participation Date and the principal amount of each series of Pool
1 Existing Notes that the Company expects to accept for exchange on
the Early Settlement Date:
Pool 1 Offers CUSIPNumbers
Title
ofSecurity(collectively, the “Pool 1
Existing Notes”)
PrincipalAmountOutstanding
AcceptancePriorityLevel
Principal Amount
Tendered(1)
Principal Amount to be
Accepted
74432QBD6
6.625% Medium-Term Notes, Series D, due
2037
$750,000,000 1
$371,716,000 $371,716,000 74432QAK1 5.900%
Medium-Term Notes, Series D, due 2036 $250,000,000 2 $67,288,000
$67,288,000 74432QAC9 5.750% Medium-Term Notes, Series B, due 2033
$500,000,000 3 $131,678,000 $131,678,000 74432QAH8 5.400%
Medium-Term Notes, Series C, due 2035 $300,000,000 4 $95,255,000
$95,255,000
____________
(1) The aggregate principal amounts of Pool 1 Existing Notes
that have been validly tendered for exchange and not validly
withdrawn as of 5:00 p.m., New York City time, on December 5, 2017,
based on information provided by the information agent and exchange
agent to the Company.
The table below identifies the aggregate principal amount of
each series of Pool 2 Existing Notes validly tendered (and not
validly withdrawn) in the Pool 2 Offers as of the Early
Participation Date and the principal amount of each series of Pool
2 Existing Notes that the Company expects to accept for exchange on
the Early Settlement Date:
Pool 2 Offers CUSIPNumbers
Title
ofSecurity(collectively, the “Pool 2
Existing Notes”)
PrincipalAmountOutstanding
AcceptancePriorityLevel
Principal Amount
Tendered(1)
Principal Amount to be
Accepted
74432QBQ7 6.200% Medium-Term Notes, Series D, due
2040 $500,000,000 1
$275,998,000 $275,998,000 74432QBU8 5.800%
Medium-Term Notes, Series D, due 2041 $325,000,000 2 $177,011,000
$177,011,000 74432QBS3 5.625% Medium-Term Notes, Series D, due 2041
$300,000,000 3 $152,820,000 $152,820,000 74432QBY0 5.100%
Medium-Term Notes, Series D, due 2043 $350,000,000 4 $189,740,000
$189,740,000
____________
(1) The aggregate principal amounts of Pool 2 Existing Notes
that have been validly tendered for exchange and not validly
withdrawn as of 5:00 p.m., New York City time, on December 5, 2017,
based on information provided by the information agent and exchange
agent to the Company.
For each $1,000 principal amount of each series of Existing
Notes validly tendered and not validly withdrawn as of the Early
Participation Date and accepted for exchange by the Company, the
following table sets forth the applicable yield and the Total
Consideration (subject to rounding and cash in lieu of fractional
amounts of New Notes) to be received by Eligible Holders, as priced
below:
CUSIPNumbers
Title ofSecurity
Fixed Spread
(bps)
Yield(1)
Total Consideration(2)
74432QBD6 6.625% Medium-Term Notes, Series D, due
2037 100 3.705%
$1,409.68* 74432QAK1 5.900% Medium-Term Notes, Series D, due 2036
90 3.605% $1,305.22* 74432QAC9 5.750% Medium-Term Notes, Series B,
due 2033 80 3.505% $1,268.05* 74432QAH8 5.400% Medium-Term Notes,
Series C, due 2035 90 3.605% $1,231.62* 74432QBQ7 6.200%
Medium-Term Notes, Series D, due 2040 105 3.755% $1,373.73**
74432QBU8 5.800% Medium-Term Notes, Series D, due 2041 105 3.755%
$1,321.08** 74432QBS3 5.625% Medium-Term Notes, Series D, due 2041
105 3.755% $1,289.68** 74432QBY0 5.100% Medium-Term Notes, Series
D, due 2043 110 3.805% $1,211.05**
____________
(1) The yield reflects the bid-side yield on the Reference
UST Security plus the applicable fixed spread, calculated in
accordance with the procedures set forth in the Offering Documents.
The Reference UST Security had a bid-side yield of 2.705% as of the
Pricing Time of the Exchange Offers. (2) The Total Consideration
includes an Early Participation Payment of $50 (payable in
applicable New Notes) for each $1,000 principal amount of each
series of Existing Notes validly tendered at or prior to the Early
Participation Date and accepted for exchange.
*
Payable in New 2047 Notes. ** Payable in New 2049 Notes.
The Exchange Offers are being conducted upon the terms and
subject to the conditions set forth in the Offering Documents. The
amount of outstanding Existing Notes validly tendered and not
validly withdrawn as of the Early Participation Date, as reflected
in the tables above, resulted in the satisfaction of the minimum
issuance condition that the Company issue at least $300,000,000
aggregate principal amount of each series of New Notes in the
applicable Exchange Offers.
For each $1,000 principal amount of Existing Notes validly
tendered and not validly withdrawn, and accepted for exchange by
the Company, Eligible Holders of such Existing Notes will also
receive a cash payment for accrued and unpaid interest on the
applicable series of Existing Notes up to, but not including, the
Early Settlement Date, as well as a cash payment for amounts due in
lieu of fractional amounts of New Notes.
The Exchange Offer will expire at 12:00 midnight, New York City
time, at the end of December 19, 2017, unless extended or earlier
terminated by the Company. In accordance with the terms of the
Exchange Offers, the Withdrawal Deadline relating to the Exchange
Offer occurred at 5:00 p.m., New York City time, on December 5,
2017. As a result, all Existing Notes that have been validly
tendered and not validly withdrawn are irrevocable, except in
certain limited circumstances where additional withdrawal rights
are required by law.
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 and unsubordinated obligations of the Company and will
rank pari passu with all other unsecured and unsubordinated
indebtedness of the Company.
The Exchange Offers are only being made, and copies of the
documents relating to the Exchange Offers will only be made
available, to holders of Existing Notes who have certified in an
eligibility certification certain matters to the Company, including
each such holder’s status as a “qualified institutional buyer” as
defined in Rule 144A under the Securities Act or a person outside
the United States 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 Global
Bondholder Services Corporation, the information agent and exchange
agent for the Exchange Offers, at (866) 470-3900 (U.S. Toll-free)
or (212) 430-3774 (Collect). Holders that wish to receive the
Offering Documents can certify eligibility on the eligibility
website at http://gbsc-usa.com/eligibility/prudential.
This 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.
Forward-Looking Statements
Certain of the statements included in this release constitute
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Words such as “expects,”
“believes,” “anticipates,” “includes,” “plans,” “assumes,”
“estimates,” “projects,” “intends,” “should,” “will,” “shall” or
variations of such words are generally part of forward-looking
statements. Forward-looking statements are made based on
management’s current expectations and beliefs concerning future
developments and their potential effects upon Prudential Financial,
Inc. and its subsidiaries. There can be no assurance that future
developments affecting Prudential Financial, Inc. and its
subsidiaries will be those anticipated by management. These
forward-looking statements are not a guarantee of future
performance and involve risks and uncertainties, and there are
certain important factors that could cause actual results to
differ, possibly materially, from expectations or estimates
reflected in such forward-looking statements, including, among
others: (1) general economic, market and political conditions,
including the performance and fluctuations of fixed income, equity,
real estate and other financial markets; (2) the availability and
cost of additional debt or equity capital or external financing for
our operations; (3) interest rate fluctuations or prolonged periods
of low interest rates; (4) the degree to which we choose not to
hedge risks, or the potential ineffectiveness or insufficiency of
hedging or risk management strategies we do implement; (5) any
inability to access our credit facilities; (6) reestimates of our
reserves for future policy benefits and claims; (7) differences
between actual experience regarding mortality, morbidity,
persistency, utilization, interest rates or market returns and the
assumptions we use in pricing our products, establishing
liabilities and reserves or for other purposes; (8) changes in our
assumptions related to deferred policy acquisition costs, value of
business acquired or goodwill; (9) changes in assumptions for our
pension and other postretirement benefit plans; (10) changes in our
financial strength or credit ratings; (11) statutory reserve
requirements associated with term and universal life insurance
policies under Regulation XXX and Guideline AXXX; (12) investment
losses, defaults and counterparty non-performance; (13) competition
in our product lines and for personnel; (14) difficulties in
marketing and distributing products through current or future
distribution channels; (15) changes in tax law, including as a
result of developing U.S. federal tax reform proposals; (16)
economic, political, currency and other risks relating to our
international operations; (17) fluctuations in foreign currency
exchange rates and foreign securities markets; (18) regulatory or
legislative changes, including the Dodd-Frank Wall Street Reform
and Consumer Protection Act and the U.S. Department of Labor’s
fiduciary rules; (19) inability to protect our intellectual
property rights or claims of infringement of the intellectual
property rights of others; (20) adverse determinations in
litigation or regulatory matters, and our exposure to contingent
liabilities, including related to the remediation of certain
securities lending activities administered by the Company; (21)
domestic or international military actions, natural or man-made
disasters including terrorist activities or pandemic disease, or
other events resulting in catastrophic loss of life; (22)
ineffectiveness of risk management policies and procedures in
identifying, monitoring and managing risks; (23) possible
difficulties in executing, integrating and realizing projected
results of acquisitions, divestitures and restructurings; (24)
interruption in telecommunication, information technology or other
operational systems or failure to maintain the security,
confidentiality or privacy of sensitive data on such systems; (25)
changes in statutory or U.S. GAAP accounting principles, practices
or policies; and (26) Prudential Financial, Inc.’s primary
reliance, as a holding company, on dividends or distributions from
its subsidiaries to meet debt payment obligations and the ability
of the subsidiaries to pay such dividends or distributions in light
of our ratings objectives and/or applicable regulatory
restrictions. Prudential Financial, Inc. does not intend, and is
under no obligation, to update any particular forward-looking
statement included in this release.
You should carefully consider the risks described in the “Risk
Factors” section in the Offering Memorandum and in our Annual
Report on Form 10-K for the year ended December 31, 2016 for a more
complete discussion of certain risks relating to our business, the
New Notes and the Exchange Offers.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171206006114/en/
Prudential Financial, Inc.Amy Pesante,
973-802-8457amy.pesante@prudential.com
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