The Dow Chemical Company (“TDCC”), a wholly-owned subsidiary of
Dow Inc. (NYSE: DOW), announced today the pricing terms of its
previously-announced cash tender offers (each, individually with
respect to a series of Notes, a “Tender Offer” with respect to such
series, and collectively, the “Tender Offers”) to purchase certain
of its debt securities and certain debt securities of Union Carbide
Corporation (“Union Carbide”), a wholly-owned subsidiary of TDCC,
listed in the table below (collectively, the “Notes”) in an
aggregate purchase price (excluding accrued interest) of up to $550
million (the “Maximum Tender Offer Amount”). The terms and
conditions of the Tender Offers are described in the Offer to
Purchase and remain unchanged.
The following table sets forth the total consideration for each
series of Notes:
Title of Notes
CUSIP / ISIN
Original Issuer
Total Principal Amount
Outstanding (SecReg & 144A)
Acceptance Priority
Level
Tender Cap(1) (Aggregate
Principal Amount)
Principal Amount to be
Purchased
Reference U.S. Treasury
Security
Reference Yield
Fixed Spread
Total
Consideration(2)(3)
7.375% Senior Notes due 2023
260543BE2
TDCC
$150,000,000
1
$75,000,000
$29,289,000
0.125% due August 15, 2023
0.152%
75 bps
$1,159.66
7.875% Senior Notes due 2023
905572AD5
Union Carbide
$175,000,000
2
$85,000,000
$45,655,000
0.125% due August 15, 2023
0.152%
75 bps
$1,177.65
7.500% Senior Notes due 2025
905581AR5
Union Carbide
$150,000,000
3
$50,000,000
$36,895,000
0.250% due July 31, 2025
0.274%
100 bps
$1,286.05
3.150% Senior Notes due 2024
260543CT8 260543CS0 (144A)
U26054KJ1 (Reg S)
TDCC
$500,000,000
4
None
$292,351,000
0.250% due July 31, 2025
0.274%
50 bps
$1,084.70
3.500% Senior Notes due 2024
260543CJ0
TDCC
$900,000,000
5
None
$88,601,000
0.250% due July 31, 2025
0.274%
50 bps
$1,102.77
3.625% Senior Notes due 2026
260543CX9 260543CW1 (144A)
U26054KL6 (Reg S)
TDCC
$750,000,000
6
$75,000,000
$0
0.250% due July 31, 2025
0.274%
90 bps
N/A
(1)
The Tender Cap for each series of Notes
represents the maximum aggregate purchase price of the applicable
series of Notes that will be accepted for purchase.
(2)
Per $1,000 principal amount of the
applicable series of Notes tendered at or prior to the Early Tender
Deadline and accepted for purchase.
(3)
The Total Consideration is based on the
applicable fixed spread specified for such series of Notes in the
table above over the Reference Yield based on the bid side price of
the Reference U.S. Treasury Security specified for each series of
Notes in the table above, and is payable to holders of the Notes
who validly tendered and did not validly withdraw their Notes at or
prior to the Early Tender Deadline and whose Notes are accepted for
purchase. The Reference Yields listed in the table were determined
at 10:00 a.m., New York City time, today, August 31, 2020, by the
Lead Dealer Manager (as defined below) for the Tender Offers upon
the terms and conditions set forth in the Offer to Purchase. The
Total Consideration for each series of Notes includes an early
tender premium of $30 per $1,000 principal amount of such Notes
accepted for purchase. In addition to the Total Consideration,
payment for Notes accepted for purchase will include accrued and
unpaid interest, rounded to the nearest cent, from the last
interest payment date with respect to such Notes to, but not
including, the Early Settlement Date.
TDCC also announced that it has elected to have an early
settlement date for the Tender Offers, anticipated to be on
September 1, 2020, for Notes validly tendered and not validly
withdrawn at or prior to 5:00 p.m., New York City time, on August
28, 2020 (the “Early Tender Deadline”) and accepted for
purchase.
Because the aggregate purchase price of Notes validly tendered
and not validly withdrawn at or prior to the Early Tender Deadline
exceeded the Maximum Tender Offer Amount, we will accept such Notes
for purchase subject to the Acceptance Priority Levels and Tender
Caps set forth in the table above and the proration arrangements
applicable to the Tender Offers, and we will not accept any Notes
tendered after the Early Tender Deadline. Notes not accepted for
purchase will be promptly credited to the account of the registered
holder of such Notes with The Depository Trust Company in
accordance with the Offer to Purchase. TDCC has accepted for
purchase $88,601,000 aggregate principal amount of the 3.500%
Senior Notes due 2024 validly tendered and not validly withdrawn as
of the Early Tender Deadline on a prorated basis as described in
the Offer to Purchase, using a proration factor of approximately
0.34%. Any 3.500% Senior Notes due 2024 not accepted for purchase
will be returned promptly to holders following the Pricing Date.
TDCC will not accept for purchase any 3.625% Senior Notes due 2026
tendered in the Tender Offers.
Our obligation to accept for payment and to pay for any of the
Notes validly tendered in the Tender Offers is not subject to any
minimum purchase price of Notes in the aggregate or of any series
being tendered, but is subject to the satisfaction or waiver of a
number of conditions described in the Offer to Purchase. The
financing condition described in the Offer to Purchase was
satisfied on August 26, 2020, upon Dow’s consummation of an
offering of senior debt securities in an aggregate principal amount
of $2.0 billion. Dow reserves the right, subject to applicable law,
to amend, extend or terminate any of the Tender Offers at any time
in its sole discretion.
TDCC has retained BofA Securities to act as lead dealer manager
in connection with the Tender Offers (the “Lead Dealer Manager”)
and BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. to
act as Co-Dealer Managers (the “Co-Dealer Managers” and, together
with the Lead Dealer Manager, the “Dealer Managers”). Questions and
requests for assistance regarding the terms of the Tender Offers
should be directed to BofA Securities at (980) 387-3907 (collect)
or debt_advisory@bofa.com (email); BNP Paribas Securities Corp. at
(888) 210-4358 (toll-free); and HSBC Securities (USA) Inc. at (866)
811-8049 (toll-free). Copies of the Offer to Purchase and any
amendments or supplements to the foregoing may be obtained from
Global Bondholder Services Corporation, the depositary and
information agent for the Tender Offers (the “Depositary and
Information Agent”), by calling (212) 430-3774 (for banks and
brokers only) or (866) 470-4300 (toll-free) (for all others) or via
contact@gbsc-usa.com.
None of TDCC, Union Carbide, the Depositary and Information
Agent, the Dealer Managers or the trustee under the indenture
governing the Notes, or any of their respective affiliates, is
making any recommendation as to whether Holders should tender or
refrain from tendering all or any portion of their Notes in
response to the Tender Offers, and no one has been authorized by
any of them to make such a recommendation. Holders must make their
own decision as to whether to tender their Notes and, if so, the
principal amount of Notes as to which action is to be taken.
Holders should consult their tax, accounting, financial and legal
advisers regarding the tax, accounting, financial and legal
consequences of participating or declining to participate in the
Tender Offers.
The Tender Offers are only being made pursuant to the Offer to
Purchase. This press release is neither an offer to purchase or
sell nor a solicitation of an offer to purchase or sell any Notes
in the Tender Offers or any other securities of TDCC and Union
Carbide. The Tender Offers are 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 in which the Tender Offers
are required to be made by a licensed broker or dealer, the Tender
Offers will be deemed to be made on behalf of TDCC or Union Carbide
by the Dealer Managers, or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
About Dow
Dow (NYSE: DOW) combines global breadth, asset integration and
scale, focused innovation and leading business positions to achieve
profitable growth. The Company’s ambition is to become the most
innovative, customer centric, inclusive and sustainable materials
science company. Dow’s portfolio of plastics, industrial
intermediates, coatings and silicones businesses delivers a broad
range of differentiated science-based products and solutions for
its customers in high-growth market segments, such as packaging,
infrastructure and consumer care. Dow operates 109 manufacturing
sites in 31 countries and employs approximately 36,500 people. Dow
delivered sales of approximately $43 billion in 2019. References to
Dow or the Company mean Dow Inc. and its subsidiaries. For more
information, please visit www.dow.com or follow @DowNewsroom on
Twitter.
Union Carbide Corporation is a chemicals and polymers company
that has been a wholly-owned subsidiary of The Dow Chemical Company
since 2001.
Cautionary Statement about Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance, financial condition, and other matters,
and often contain words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,”
“plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,”
“will be,” “will continue,” “will likely result,” “would” and
similar expressions, and variations or negatives of these words.
Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may
cause actual results to differ materially from the forward-looking
statements.
Forward-looking statements include, but are not limited to:
expectations as to future sales of Dow’s products; the ability to
protect Dow’s intellectual property in the United States and
abroad; estimates regarding Dow’s capital requirements and need for
and availability of financing; estimates of Dow’s expenses, future
revenues and profitability; estimates of the size of the markets
for Dow’s products and services and Dow’s ability to compete in
such markets; expectations related to the rate and degree of market
acceptance of Dow’s products; the outcome of certain Dow
contingencies, such as litigation and environmental matters;
estimates of the success of competing technologies that may become
available; the continuing global and regional economic impacts of
the coronavirus disease 2019 (“COVID-19”) pandemic and crude oil
supply and price volatility; estimates regarding benefits achieved
through contemplated restructuring activities, such as workforce
reduction, exit and disposal activities; and expectations regarding
the benefits and costs associated with each of the foregoing.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Forward-looking statements
are based on certain assumptions and expectations of future events
which may not be realized and speak only as of the date the
statements were made. In addition, forward-looking statements also
involve risks, uncertainties and other factors that are beyond
Dow’s control that could cause Dow’s actual results to differ
materially from those projected, anticipated or implied in the
forward-looking statements. These factors include, but are not
limited to: fluctuations in energy and raw material prices; failure
to develop and market new products and optimally manage product
life cycles; significant litigation and environmental matters;
failure to appropriately manage process safety and product
stewardship issues; changes in laws and regulations or political
conditions; global economic and capital markets conditions, such as
inflation, market uncertainty, interest and currency exchange
rates, and equity and commodity prices; business or supply
disruptions; security threats, such as acts of sabotage, terrorism
or war; weather events and natural disasters; ability to protect,
defend and enforce Dow’s intellectual property rights; increased
competition; changes in relationships with Dow’s significant
customers and suppliers; unanticipated expenses such as litigation
or legal settlement expenses; unanticipated business disruptions;
Dow’s ability to predict, identify and interpret changes in
consumer preferences and demand; Dow’s ability to complete proposed
divestitures or acquisitions; Dow’s ability to realize the expected
benefits of acquisitions if they are completed; the availability of
financing to Dow in the future and the terms and conditions of such
financing; disruptions in Dow’s information technology networks and
systems; the continuing risks related to the COVID-19 pandemic and
crude oil supply and price volatility; and Dow’s ability to realize
the expected benefits of restructuring activities if they are
approved and completed. Additionally, there may be other risks and
uncertainties that Dow is unable to identify at this time or that
Dow does not currently expect to have a material impact on its
business.
Risks related to achieving the anticipated benefits of Dow’s
separation from DowDuPont include, but are not limited to, a number
of conditions outside the control of Dow, including risks related
to: (i) Dow’s inability to achieve some or all of the benefits that
it expects to receive from the separation from DowDuPont; (ii)
certain tax risks associated with the separation; (iii) the failure
of Dow’s pro forma financial information to be a reliable indicator
of Dow’s future results; (iv) Dow’s inability to receive
third-party consents required under the separation agreement; (v)
non-compete restrictions under the separation agreement; (vi)
receipt of less favorable terms in the commercial agreements Dow
entered into with DuPont and Corteva, Inc. (“Corteva”), including
restrictions under intellectual property cross-license agreements,
than Dow would have received from an unaffiliated third party; and
(vii) Dow’s obligation to indemnify DuPont and/or Corteva for
certain liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished.
For a more detailed discussion of Dow’s risks and uncertainties,
see the section titled “Risk Factors” contained in Part II, Item 1A
of the combined Dow Inc. and TDCC Quarterly Reports on Form 10-Q
for the quarterly periods ended March 31, 2020 and June 30, 2020
and Part I, Item 1A of the combined Dow Inc. and TDCC Annual Report
on Form 10-K for the fiscal year ended December 31, 2019. Dow Inc.
and TDCC assume no obligation to update or revise publicly any
forward-looking statements whether because of new information,
future events or otherwise, except as required by securities and
other applicable laws.
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MEDIA: Kyle Bandlow +1.989.638.2417 kbandlow@dow.com
INVESTORS: Colleen Kay +1.989.636.0920 ckay@dow.com
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