Corteva's seed company opened exchange offers for $1.6bn of EIDP bonds on Thursday, and a holder cannot tender without also voting to strip the covenants off the notes left behind
The consent is not optional, and it cannot be given separately.
Vylor Inc., the Delaware subsidiary that will hold Corteva's seed business after the planned separation, opened private exchange offers on Thursday for any and all of three series of notes issued by EIDP, Inc.: the 2.300 percent notes due 2030 and the 5.125 percent notes due 2032, $500m of each, and the 4.800 percent notes due 2033, $600m. The new Vylor notes carry the same interest rate, the same maturity and the same interest payment dates as the paper they replace. Alongside the offers runs a consent solicitation, and the filing welds the two together: a holder who validly tenders is automatically treated as having delivered the related consents, and eligible holders may not tender without consenting or consent without tendering.
What the consents do
The proposed amendments to the EIDP base indenture would eliminate substantially all of the restrictive covenants and events of default, other than those relating to payment and to bankruptcy. A separate amendment to each supplemental indenture would remove the obligation to offer to repurchase the notes on a change of control.
The base indenture amendment needs holders of at least a majority of all the EIDP notes, voting as a single class, and the exchange offers are conditioned on receiving it. The per series amendments need a majority of each series and are a condition of nothing.
The price of being late, and the price of everybody turning up
Tender by 5 p.m. New York time on 19 August and each $1,000 of EIDP notes gets $1,000 of Vylor notes plus cash. Tender after that and the same $1,000 gets $970 of Vylor notes and no cash at all.
The cash payment runs in the opposite direction to the way these things usually read. It is $2.50 for every $1,000 of a series outstanding, divided among the notes actually tendered, so the fewer holders who come forward the more each of them collects, from $2.50 per $1,000 if everybody tenders to approximately $5.00 if a bare majority does. The offers expire on 3 September. Everything is conditioned on the separation itself being completed, and that is the one condition Vylor may not waive.
The accounting runs the other way from the legal form
One sentence in the offering memorandum excerpts is worth the rest of the document.
Legally, Corteva is spinning off Vylor. Shareholders receive Vylor stock in a distribution the company intends to be tax free, and Vylor walks away as the new independent company. For accounting purposes the presentation is reversed, and the memorandum says so in terms: irrespective of the legal form of the spin-off, the crop protection business will be presented as being spun off from Corteva, primarily because of Vylor's relative significance.
The pro forma numbers show why. Corteva's 2025 net sales were $17,401m. Taking crop protection out removes $7,503m, and Vylor is left with pro forma net sales of $10,067m for the year. The seed half is the larger half, so under GAAP it is the one that continues and crop protection is the one that leaves. Vylor carries an assumed $5,476m of principal debt into that structure and distributes $3,536m of cash the other way, to what the memorandum calls New Corteva.
Corteva said on 30 July that it expects to complete the split on or about 1 October. Its board can still abandon it.
