PURCHASE, N.Y., Oct. 19 /PRNewswire-FirstCall/– PepsiCo, Inc. (NYSE: PEP) today announced that it has commenced a cash tender offer for a portion of its outstanding 7.90% Senior Notes due 2018 (referred to below as the "notes"). The tender offer consists of an offer to purchase up to $500,000,000 aggregate principal amount (referred to below as the "tender cap") of the notes, and is being made pursuant to an "Offer to Purchase" dated today, which sets forth a more comprehensive description of the terms of the offer. The amount being tendered for represents approximately 25% of the aggregate outstanding principal amount of the notes subject to the offer. The table below sets forth information with respect to the notes and the tender offer. The principal amount of notes that is purchased in the tender offer may be prorated as set forth in the Offer to Purchase. Subject to applicable law, PepsiCo has the right to increase the tender cap at its discretion.
Title of Notes
Principal Amount Outstanding
Reference Treasury Security
Bloomberg Reference Page
Fixed Spread (bp)
Early Tender Payment (1)
Hypothetical Total Consideration(2)
7.90% Senior Notes due 2018
2.625% due August 15, 2020
$1,347.97 per $1,000 principal amount
(1) Per $1,000 principal amount of Notes tendered and accepted for purchase. Included in Total Consideration; not included in Tender Offer Consideration.
(2) Based upon a Reference Yield (as defined in the Offer to Purchase) of 2.578% as of 2:00 p.m., New York City time, on October 15, 2010 and the resulting Tender Offer Yield (as defined in the Offer to Purchase) of 2.978%; excludes accrued and unpaid interest.
The tender offer is scheduled to expire at the expiration date, which is at 11:59 p.m., New York City time, on November 16, 2010, unless extended or earlier terminated. Holders of notes must tender and not withdraw their notes at or before the early tender date, which is 5:00 p.m., New York City time, on November 1, 2010, unless extended, to receive the "Total Consideration." PepsiCo expects to accept and purchase, promptly following the early tender date, all notes tendered at or prior to the early tender date, up to the amount of the tender cap and subject to the other terms and conditions described in the Offer to Purchase.
The Total Consideration payable for each $1,000 principal amount of notes validly tendered at or before the early tender date and accepted for payment will be determined in the manner described in the Offer to Purchase by reference to a fixed spread of 40 basis points (or 0.4%) over the bid-side yield to maturity of the 2.625% U.S. Treasury security due August 15, 2020 as displayed on the Bloomberg Government Price Monitor on page "PX1" as of 2:00 p.m., New York City time, on November 1, 2010.
Holders who tender their notes after the early tender date will, if such notes are purchased by us, receive the "Tender Offer Consideration," which is the Total Consideration minus an early tender payment of $30 per $1,000 principal amount of notes, which will be payable promptly following the expiration date. Because PepsiCo intends to accept for payment all notes validly tendered at or prior to the early tender date, subject to the tender cap and the other terms and conditions described in the Offer to Purchase, and will only prorate such notes if the aggregate amount of notes so tendered exceeds the tender cap, there is no assurance as to the amount of notes, if any, that PepsiCo will accept that are tendered after the early tender date.
In addition to the Total Consideration or Tender Offer Consideration, as applicable, holders of notes accepted for payment will receive accrued and unpaid interest from the last interest payment date for the notes to, but not including, the applicable settlement date.
Except as required by applicable law, notes tendered may be withdrawn only at or before the withdrawal date, which is 5:00 p.m., New York City time, on November 1, 2010, and notes tendered after the withdrawal date and before the expiration of the tender offer may not be withdrawn.
PepsiCo has retained J.P. Morgan Securities LLC and RBS Securities Inc. to serve as dealer managers for the tender offer and has retained Global Bondholder Services Corporation to serve as the depositary and information agent for the tender offer. Requests for documents may be directed to Global Bondholder Services Corporation by telephone at (866) 387-1500 or (212) 430-3774 or in writing at 65 Broadway – Suite 404, New York, NY 10006. Questions regarding the tender offer may be directed to either J.P. Morgan Securities LLC at (866) 834-4666 or collect at (212) 834-2494 or RBS Securities Inc. at (877) 297- 9832 or collect at (203) 897-6145.
The tender offer is subject to the satisfaction of certain conditions. If any of the conditions is not satisfied, PepsiCo is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event subject to applicable laws, and may terminate the tender offer. The tender offer is not conditioned on the tender of a minimum principal amount of notes. PepsiCo is not soliciting consents from holders of notes in connection with the tender offer. This press release is neither an offer to purchase nor a solicitation of an offer to sell the notes or any other securities. The tender offer is made only by and pursuant to the terms of the Offer to Purchase and the related Letter of Transmittal and the information in this press release is qualified by reference to the Offer to Purchase and the related Letter of Transmittal. None of PepsiCo, the dealer managers or the depositary and information agent makes any recommendations as to whether holders should tender their notes pursuant to the tender offer. Holders must make their own decisions as to whether to tender notes, and, if so, the principal amount of notes to tender.
PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales. Our main businesses – Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade – also make hundreds of other nourishing, tasty foods and drinks that bring joy to our consumers in more than 200 countries. With annualized revenues of nearly $60 billion, PepsiCo's people are united by our unique commitment to sustainable growth, called Performance with Purpose. By dedicating ourselves to offering a broad array of choices for healthy, convenient and fun nourishment, reducing our environmental impact, and fostering a diverse and inclusive workplace culture, PepsiCo balances strong financial returns with giving back to our communities worldwide. For more information, please visit www.pepsico.com.
Caution Concerning Forward-Looking Statements
Statements in this release that are "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in demand for PepsiCo's products, as a result of changes in consumer preferences and tastes or otherwise; damage to PepsiCo's reputation; trade consolidation, the loss of any key customer, or failure to maintain good relationships with PepsiCo's bottling partners; PepsiCo's ability to hire or retain key employees or a highly skilled and diverse workforce; unstable political conditions, civil unrest or other developments and risks in the countries where PepsiCo operates; changes in the legal and regulatory environment; PepsiCo's ability to build and sustain proper information technology infrastructure, successfully implement its ongoing business process transformation initiative or outsource certain functions effectively; unfavorable economic conditions and increased volatility in foreign exchange rates; PepsiCo's ability to compete effectively; increased costs, disruption of supply or shortages of raw materials and other supplies; disruption of PepsiCo's supply chain; climate change or changes in legal, regulatory or market measures to address climate change; PepsiCo's ability to realize the anticipated cost savings and other benefits expected from the acquisitions of The Pepsi Bottling Group, Inc. and PepsiAmericas, Inc.; failure to renew collective bargaining agreements or strikes or work stoppages; and any downgrade of PepsiCo's credit rating resulting in an increase of its future borrowing costs.
For additional information on these and other factors that could cause PepsiCo's actual results to materially differ from those set forth herein, please see PepsiCo's filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE PepsiCo, Inc.