L Brands, Inc. (the “Company”) (NYSE:LB) announced today the
results, as of 5:00 p.m., New York City time, on June 13, 2018 (the
“Early Participation Date”) of its previously announced private
offers (the “Offers”) to exchange certain of its outstanding senior
notes listed in the table below (collectively, the “Outstanding
Notes”) .
Early Results and Pricing Terms
Based on information provided by D.F. King & Co., Inc., the
exchange agent for the Offers, $325 million aggregate principal
amount of Outstanding Notes were validly tendered for exchange and
not validly withdrawn as of the Early Participation Date.
The pricing terms were determined as of 11:00 a.m., New York
City time, on June 14, 2018 (the “Price Determination Date”) in
accordance with the terms set out in the confidential offering
memorandum, dated May 31, 2018 (the “Confidential Offering
Memorandum”).
The Total Exchange Consideration identified below for the
Outstanding Notes was determined as set forth in the Confidential
Offering Memorandum and will be paid in a combination of New Notes
and cash. The Total Exchange Consideration includes an early
participation premium of $50 payable in New Notes to Eligible
Holders who have validly tendered and who have not validly
withdrawn their Outstanding Notes prior to the Early Participation
Date.
The following table indicates, among other things, the principal
amount of Outstanding Notes validly tendered and accepted for
exchange as of the Early Participation Date and the Total Exchange
Consideration for each $1,000 principal amount of Notes:
|
|
|
Composition of Total Exchange
Consideration(1) |
|
CUSIP |
Title of Security |
Principal Amount Tendered and Accepted as of
Early Participation Date |
Early Participation Premium (New
Notes) |
New Notes Component |
Cash Component |
Total Exchange Consideration |
532716AS6 |
7.000%
Senior Notes due 2020 |
$61,619,000 |
$50.00 |
$850.00 |
$170.94 |
$1,070.94 |
532716AT4 |
6.625%
Senior Notes due 2021 |
$220,056,000 |
$50.00 |
$850.00 |
$182.87 |
$1,082.87 |
532716AU1 |
5.625%
Senior Notes due 2022 |
$43,840,000 |
$50.00 |
$950.00 |
$32.15 |
$1,032.15 |
(1) The Total Exchange Consideration will be paid in a
combination of (a) a principal amount of New Notes (the “New Notes
Component”), (b) an amount of cash equal to the cash component (the
“Cash Component”) and (c) a principal amount of New Notes equal to
the Early Participation Premium (exclusive of accrued
interest).
In addition to the Total Exchange Consideration or Exchange
Consideration, as applicable, eligible holders with Outstanding
Notes that are accepted for exchange will receive a cash payment
representing (i) the accrued and unpaid interest to, but not
including, the applicable settlement date on Outstanding Notes
accepted for exchange and (ii) amounts due in lieu of any
fractional amounts of New Notes.
The New Notes will mature on January 15, 2027 and will bear
interest at a rate per annum of 6.694%, which is equal to the sum
of (i) the bid-side yield on the 10-Year Treasury on the Price
Determination Date (2.944%) and (ii) 3.750% (375 basis points). The
Company expects to deliver New Notes and cash in exchange for
tendered Outstanding Notes accepted for exchange on June 18, 2018
(the “Early Settlement Date”), subject to satisfaction or waiver of
the conditions to the Offers and in accordance with the other terms
and conditions disclosed in the Confidential Offering Memorandum.
The Company expects the acceptance of all tendered Outstanding
Notes to result in the issuance of approximately $297 million
aggregate principal amount of New Notes and has waived the
condition that at least $300.0 million aggregate principal amount
of New Notes be issued in exchange for Outstanding Notes.
The Offers will expire at 11:59 p.m., New York City time, on
June 27, 2018, unless extended by the Company. In accordance with
the terms of the Offers, tendered Outstanding Notes may no longer
be withdrawn.
The New Notes have not been registered under the Securities Act
of 1933 (as amended, the “Securities Act”) or any state securities
laws. Therefore, the New Notes may not be offered or sold in the
United States absent registration or an applicable exemption from
the registration requirements of the Securities Act and any
applicable state or foreign 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.
Accordingly, the offers are being made, and the New Notes are being
offered and will be issued, only to (1) “qualified institutional
buyers” as defined in Rule 144A under the Securities Act (“QIBs”),
and (2) outside the United States, to persons other than “U.S.
persons” as defined in Rule 902 under the Securities Act in
compliance with Regulation S under the Securities Act (such
holders, the “eligible holders”). Only eligible holders who have
completed and returned an eligibility certification (the
“eligibility certification”), available from D.F. King & Co.,
are authorized to receive and review the offering memorandum and to
participate in the offers. The Company will enter into a
registration rights agreement with respect to the New Notes.
Documents relating to the Offers will only be distributed to
holders of the Outstanding Notes that complete and return a letter
of eligibility confirming that they are eligible holders. Holders
of the Outstanding Notes that desire a copy of the eligibility
letter may contact D.F. King & Co., Inc., the information agent
for the Offers, by calling toll-free at (212) 269-5550 or toll free
at (888) 548-6498 or e-mailing lb@dfking.com. Holders of the
Outstanding Notes may also complete and submit a letter of
eligibility online at www.dfking.com/lb.
This press release is not an offer to sell or a solicitation of
an offer to buy any security. The Offers are being made solely
pursuant to the Confidential Offering Memorandum and only to such
persons and in such jurisdictions as is permitted under applicable
law.
ABOUT L BRANDS:
L Brands, through Victoria’s Secret, PINK, Bath & Body
Works, La Senza and Henri Bendel, is an international company. The
company operates approximately 3,070 company-owned specialty stores
in the United States, Canada, the United Kingdom, Ireland and
Greater China, and its brands are sold in more than 800 additional
franchised locations worldwide. The company’s products are also
available online at www.VictoriasSecret.com,
www.BathandBodyWorks.com, www.HenriBendel.com and
www.LaSenza.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
We caution that any forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995)
contained in this press release or made by our company or our
management involve risks and uncertainties and are subject to
change based on various factors, many of which are beyond our
control. Accordingly, our future performance and financial results
may differ materially from those expressed or implied in any such
forward-looking statements. Words such as “estimate,” “project,”
“plan,” “believe,” “expect,” “anticipate,” “intend,” “planned,”
“potential” and any similar expressions may identify
forward-looking statements. Risks associated with the following
factors, among others, in some cases have affected and in the
future could affect our financial performance and actual results
and could cause actual results to differ materially from those
expressed or implied in any forward-looking statements included in
this press release or otherwise made by our company or our
management:
|
• |
general
economic conditions, consumer confidence, consumer spending
patterns and market disruptions including severe weather
conditions, natural disasters, health hazards, terrorist
activities, financial crises, political crises or other major
events, or the prospect of these events; |
|
• |
the
seasonality of our business; |
|
• |
the
dependence on mall traffic and the availability of suitable store
locations on appropriate terms; |
|
• |
our ability
to grow through new store openings and existing store remodels and
expansions; |
|
• |
our ability
to successfully expand internationally and related risks; |
|
• |
our
independent franchise, license and wholesale partners; |
|
• |
our direct
channel businesses; |
|
• |
our ability
to protect our reputation and our brand images; |
|
• |
our ability
to attract customers with marketing, advertising and promotional
programs; |
|
• |
our ability
to protect our trade names, trademarks and patents; |
|
• |
the highly
competitive nature of the retail industry and the segments in which
we operate; |
|
• |
consumer
acceptance of our products and our ability to manage the life cycle
of our brands, keep up with fashion trends, develop new merchandise
and launch new product lines successfully; |
|
• |
our ability
to source, distribute and sell goods and materials on a global
basis, including risks related to: |
|
|
- political instability, significant health hazards,
environmental hazards or natural disasters;
- duties, taxes and other charges;
- legal and regulatory matters;
- volatility in currency exchange rates;
- local business practices and political issues;
- potential delays or disruptions in shipping and transportation
and related pricing impacts;
- disruption due to labor disputes; and
- changing expectations regarding product safety due to new
legislation;
|
|
• |
our
geographic concentration of vendor and distribution facilities in
central Ohio; |
|
• |
fluctuations in foreign currency exchange rates; |
|
• |
stock price
volatility; |
|
• |
our ability
to pay dividends and related effects; |
|
• |
our ability
to maintain our credit rating; |
|
• |
our ability
to service or refinance our debt; |
|
• |
our ability
to retain key personnel; |
|
• |
our ability
to attract, develop and retain qualified associates and manage
labor-related costs; |
|
• |
the ability
of our vendors to deliver products in a timely manner, meet quality
standards and comply with applicable laws and regulations; |
|
• |
fluctuations in product input costs; |
|
• |
our ability
to adequately protect our assets from loss and theft; |
|
• |
fluctuations in energy costs; |
|
• |
increases
in the costs of mailing, paper and printing; |
|
• |
claims
arising from our self-insurance; |
|
• |
our ability
to implement and maintain information technology systems and to
protect associated data; |
|
• |
our ability
to maintain the security of customer, associate, third-party or
company information; |
|
• |
our ability
to comply with regulatory requirements; |
|
• |
legal and
compliance matters; and tax, trade and other regulatory
matters. |
We are not under any obligation and do not intend to make
publicly available any update or other revisions to any of the
forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release
or to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be realized.
In evaluating those statements, you should specifically consider
various factors, including risks and uncertainties discussed in the
Confidential Offering Memorandum. Additional information regarding
these and other factors can be found in Item 1A. Risk Factors in
our 2017 Annual Report on Form 10-K.
For further
information, please contact: |
L Brands: |
|
Investor Relations |
Media Relations |
Amie Preston |
Tammy Roberts
Myers |
(614) 415-6704 |
(614) 415-7072 |
apreston@lb.com |
communications@lb.com |
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