AIG sets pricing, gives early results in maximum tender offer for 17 series of notes

By Jennifer Chiou

New York, March 31 – American International Group, Inc. announced the early participation results of its maximum tender offer, which is independent of its prior any-and-all offer to buy notes that are part of its Direct Investment book.

The offers were announced on March 17, and AIG will pay up to $1.25 billion to buy notes and debentures in the maximum offer, which has an early participation date of 5 p.m. ET on March 30 and expires at 11:59 p.m. ET on April 13.

As of the early tender deadline, the following notes were tendered in the maximum offer, listed in order of acceptance priority along with their purchase prices:

• $587.9 million, or 49.2%, of its $1,195,500,000 of 8.175% series A-6 junior subordinated debentures due May 15, 2038. The purchase price is $1,423.04 per $1,000 principal amount;

• $57.3 million, or 42.1%, of its $136.2 million of 7.57% junior subordinated deferrable interest debentures, series A, due Dec. 1, 2045 issued by AIG Life Holdings, Inc. The purchase price is $1,370.81 per $1,000 principal amount;

•£60.1 million, or 91.5%, of its £65.7 million of 8.625% series A-8 junior subordinated debentures due May 22, 2018. The purchase price is £1,187.67 per £1,000 principal amount;

• $38.9 million, or 25%, of its $155.4 million of 8.5% junior subordinated debentures due July 1, 2030 issued by AIG Life Holdings, Inc. The purchase price is $1,416.37 per $1,000 principal amount;

• €30.3 million, or 69.1%, of its €43.8 million of 8% series A-7 junior subordinated debentures due May 22, 2018. The purchase price is €1,186.11 per €1,000 principal amount;

• $17.4 million, or 7.1%, of its $244.6 million of 8.125% junior subordinated deferrable interest debentures, series B, due March 15, 2046 issued by AIG Life Holdings, Inc. The purchase price is $1,447.39 per $1,000 principal amount;

• $350.8 million, or 70.7%, of its $496.2 million of 6.25% series A-1 junior subordinated debentures due March 15, 2037. The purchase price is $1,180.10 per $1,000 principal amount;

•£125.1 million, or 77.4%, of its £161.7 million of 5.75% series A-2 junior subordinated debentures due March 15, 2017. The purchase price is £1,065.13 per £1,000 principal amount;

• $15.2 million, or 17.6%, of its $86.4 million of 8.125% debentures due April 28, 2023 issued by SunAmerica Inc. The purchase price is $1,368.09 per $1,000 principal amount;

•£199 million, or 70.7%, of its £281.4 million of 6.765% sterling notes due Nov. 15, 2017. The purchase price is £1,144.02 per £1,000 principal amount;

• €15.2 million, or 24.6%, of its €61.8 million of 6.797% euro notes due Nov. 15, 2017. The purchase price is €1,162.66 per €1,000 principal amount;

• $25.9 million, or 17.3%, of its $150 million of 6.625% notes due Feb. 15, 2029 issued by AIG Life Holdings, Inc. The purchase price is $1,360.14 per $1,000 principal amount;

• $1.8 million, or 8.7%, of its $20.3 million of 5.6% debentures due July 31, 2097 issued by SunAmerica Inc. The purchase price is $1,128.88 per $1,000 principal amount;

• $17.3 million, or 12.8%, of its $135.5 million of 7.5% notes due July 15, 2025 issued by AIG Life Holdings, Inc. The purchase price is $1,389.44 per $1,000 principal amount;

• €219.9 million, or 71.8%, of its €306.2 million of 4.875% series A-3 junior subordinated debentures due March 15, 2017. The purchase price is €1,056.71 per €1,000 principal amount;

• $162.6 million, or 66.8%, of its $243.5 million of 6.82% dollar notes due Nov. 15, 2037. The purchase price is $1,445.33 per $1,000 principal amount; and

• $603.1 million, or 25%, of its $2,411,000,000 of 5.85% medium-term notes, series G, due Jan. 16, 2018. The purchase price is $1,119.30 per $1,000 principal amount.

Pricing was set at 10 p.m. ET on the business day following the early participation date.

All prices include an early tender payment of $50, €50 or £50 per $1,000, €1,000 or £1,000 principal amount, respectively, that will only be paid to holders who tendered by the early tender deadline.

AIG will also pay accrued interest up to but excluding the settlement date, which is expected to be April 15.

The tender offer was oversubscribed.

The issuer said that assuming no notes or debentures are validly tendered after the early participation date, it intends to accept all notes and debentures validly tendered of acceptance priority levels 1 through 6, while validly tendered debentures of acceptance priority level 7 will be accepted subject to proration.

No notes or debentures of acceptance priority levels 8 through 17 will be accepted, according to a news release.

Any-and-all offer results

The company previously announced the results of its any-and-all tender offer to buy notes that are part of its Direct Investment book. It said it will buy all notes tendered.

The response was as follows:

• None of the ¥2 billion of 2.275% notes due Aug. 8, 2016 were tendered. The purchase price is ¥1,028.75 per ¥1,000 principal amount;

• ¥2.7 billion, or 90%, of the ¥3 billion of 2.275% notes due Aug. 8, 2016 were tendered. The purchase price is ¥1,028.75 per ¥1,000 principal amount;

• MXN 172.7 million, or 39.4%, of the MXN 437.8 million of 8.59% notes due Sept. 15, 2016 were tendered. The purchase price is MXN 1,065.00 per MXN 1,000 principal amount;

• None of the ¥20 billion of notes due Oct. 24, 2016 were tendered. The purchase price is ¥1,052.50 per ¥1,000 principal amount;

• CHF 61.9 million, or 53.8%, of the CHF 114.9 million of 2.75% notes due 2016 were tendered. The purchase price is CHF 1,506.25 per CHF 1,000 principal amount;

• MXN 136 million, or 9.1%, of the MXN 1,488,000,000 of 7.98% notes due June 15, 2017 were tendered. The purchase price is MXN 1,075.00 per MXN 1,000 principal amount;

• CHF 80.1 million, or 69.9%, of the CHF 114.7 million of 3.375% notes due 2017 were tendered. The purchase price is CHF 1,085.00 per CHF 1,000 principal amount;

• None of the ¥20 billion notes due Nov. 22, 2017 were tendered. The purchase price is ¥1,062.25 per ¥1,000 principal amount;

• None of the ¥20 billion notes due April 24, 2018 were tendered. The purchase price is ¥1,095.00 per ¥1,000 principal amount;

• None of the ¥20 billion notes due Aug. 23, 2018 were tendered. The purchase price is ¥1,100.00 per ¥1,000 principal amount;

• None of the NOK 250 million of notes due 2018 issued by AIG-FP Matched Funding were tendered. The purchase price is NOK 1,190.00 per NOK 1,000 principal amount;

• None of the €21.8 million of callable fixed-rate notes due March 19, 2047 issued by AIG-FP Matched Funding were tendered. The purchase price is €1,088.75 per €1,000 principal amount;

• All of the $10 million callable zero-coupon notes due April 2035 issued by AIG-FP Matched Funding were tendered. The purchase price is $1,951.25 per $1,000 principal amount;

• $1.7 million, or 8.3%, of the $20 million of floating-rate medium-term notes due Nov. 27, 2046 issued by AIG-FP Matched Funding were tendered. The purchase price is $982.50 per $1,000 principal amount;

• None of the $300,000 of floating-rate medium-term notes due Dec. 5, 2046 issued by AIG-FP Matched Funding was tendered. The purchase price is $982.50 per $1,000 principal amount;

• None of the $10 million of index-linked range accrual notes due Nov. 20, 2017 issued by AIG-FP Matched Funding were tendered. The purchase price is $1,145.00 per $1,000 principal amount;

• None of the $2.5 million of floating-rate medium-term notes due Nov. 27, 2047 issued by AIG-FP Matched Funding were tendered. The purchase price is $985.00 per $1,000 principal amount;

• $500,000, or 13.3%, of the $3.8 million of 0% commodity index linked notes due May 11, 2017 issued by AIG-FP Private Funding (Cayman) Ltd. were tendered. The purchase price is $660.00 per $1,000 principal amount;

• $100,000, or 1.3%, of the $7.7 million of 0% commodity index linked notes series 2006-B due July 29, 2016 issued by AIG-FP Private Funding (Cayman) Ltd. were tendered. The purchase price is $610.00 per $1,000 principal amount;

• None of the $1.5 million of 0% commodity index linked notes due Sept. 26, 2016 issued by AIG-FP Private Funding (Cayman) Ltd. were tendered. The purchase price is $762.50 per $1,000 principal amount;

• $596.1 million, or 71.0%, of the $840 million of 5.45% medium-term notes series MP, matched investment program due May 18, 2017 were tendered. The purchase price was set at $1,092.95 per $1,000 principal amount at 10 a.m. ET on March 25 using a spread of 47 basis points over the 0.5% Treasury due Feb. 28, 2017;

• €229.9 million, or 38.3%, of the €600 million of 5% notes due 2017 were tendered. The purchase price was at €1,107.19 per €1,000 principal amount at 10 a.m. ET on March 25 using a spread of 10 bps over the June 2017 interpolated swap rate.

AIG will pay accrued interest on all notes except those with zero coupons.

In the any-and-all tender offer, AIG was tendering for notes that are part of its Direct Investment book and will fund the offer using cash allocated to this book.

This tender offer expired at 5 p.m. ET on March 25.

For both offers, Barclays Bank plc (+44 (0) 207 773 8990), Barclays Capital Inc. (800 438-3242 or 212 528-7581), BofA Merrill Lynch (+44 (0) 20 7995 2929, 888 292-0070 or 980 387-3907), Goldman Sachs & Co. (800 828-3182 or 212 902-5183) and Goldman Sachs International (+44 (0) 207 774 9862) were the joint lead dealer managers.

Global Bondholder Services Corp. (212 430-3774 banks and brokers only, 866 924-2200, 212 430-3774 or aig@gbsc-usa.com) was the information agent and depositary.

AIG is a New York-based insurer.

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