DowDuPont (DWDP) Prices Senior Unsecured Notes Offering
Zacks Investment Research | Nov 14, 2018 08:42PM ET
DowDuPont Inc. (NYSE:DWDP) declared the pricing of eight series of senior unsecured notes in total principal amount of $12.7 billion. The offering is expected to close on Nov 28, and is subject to customary closing conditions.
Details of the Notes Offering
The notes offering consists of $1.85 billion of 4.493% notes due 2025, $2.25 billion of 4.725% notes due 2028, $1.5 billion of 3.766% notes due 2020, $1.65 billion of 5.319% notes due 2038, $2.5 billion of 4.205% notes due 2023, $2.15 billion of 5.419% notes due 2048, $300 million of Floating Rate Notes due 2023 and $500 million of Floating Rate Notes due 2020.
Separations and Distributions of Subsidiaries
The company stated that following the previously announced separations and distributions of Dow Holdings Inc (expected on Apr 1, 2019) and Corteva, Inc (expected on Jun 1, 2019), it expects to retain only the specialty products business. Following this, the company is expected to change its name to "DuPont".
Moreover, if each of the separations and distributions has not been completed on or before May 1, 2020 or if the company abandons any of the separations or distributions before such date, the company will have to redeem each series of notes at a redemption price equal to 101% of the principal amount along with accrued and unpaid interest.
Per the company, each series of notes will be a senior unsecured obligation. Moreover, they will rank equally with the company's future senior unsecured debt outstanding from time to time. Notably, the notes are not guaranteed by any of the company's subsidiaries. Each series of notes will continue to be a senior unsecured obligation of DuPont after distributions and separations.
Recently, the company’s subsidiary, E. I. du Pont de Nemours and Company ("Historical DuPont"), initiated a cash tender offer for any and all of certain series of outstanding notes associated with the deleveraging of Corteva.
Purpose of the Offering
DowDuPont plans to use the net proceeds of the offering along with borrowings under term loan facilities to reduce outstanding liabilities that would otherwise be allocable to the subsidiaries — Corteva and Dow — by roughly $10.1 billion and roughly $2.024 billion, respectively. The company will also fund the repurchase of up to $3 billion of common stock in connection with the earlier announced share repurchase program. Also, it will pay any associated fees, premiums and expenses.
Price performance
DowDuPont’s shares have lost 14.8% in the past six months compared with the Original post
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