Baxter has offered to buy back up to $500m of its own bonds, and the queue is ordered so the longest dated paper is taken first
Holders have until 17 August to get the better price.
Baxter International told the Securities and Exchange Commission on Tuesday morning that it has begun cash tender offers for four series of its senior notes, capped so that the total purchase price, excluding accrued interest, does not exceed $500m. The cap is on money, not on principal, which is what makes the ordering matter. The four series carry about $3.0bn of principal between them, so most of what is eligible will not be bought.
The company will work down the list in order.
The order
First in the queue are the 3.132 percent notes due 2051, with $750m outstanding, priced at 115 basis points over the 4.750 percent Treasury due February 2056. Second are the 3.500 percent notes due 2046, $450m outstanding, at 110 basis points over the 5.000 percent Treasury due May 2046. Third are the 4.500 percent notes due 2043, $257.4m outstanding, at 130 basis points over the same Treasury. Fourth and last are the 2.539 percent notes due 2032, and they are much the biggest of the four at $1.55bn outstanding, priced at 100 basis points over the 4.375 percent Treasury due July 2031.
Read down that list and the maturities fall in order: 2051, then 2046, then 2043, then 2032. The company is reaching for its longest dated debt first and its nearest last.
The dates, and the premium that is not extra
Each offer expires at 5 p.m. New York time on 1 September. The earlier deadline is 17 August, which is both the early tender time and the last moment a tendered note can be withdrawn. Notes accepted by then are expected to settle on 20 August, and everything accepted afterwards on 3 September.
The early tender premium is $30 per $1,000 of principal. The document states plainly that it is included in the total consideration and does not constitute an additional or increased payment, which means it is the difference between the two deadlines rather than a bonus on top of either.
Neither the filing nor the press release gives a reason for the offers.
