British American Tobacco starts capped tender offer for seven series

By Marisa Wong

Los Angeles, April 15 – British American Tobacco plc announced that wholly owned subsidiaries B.A.T Capital Corp. and B.A.T. International Finance plc have begun concurrent but separate tender offers to purchase the outstanding notes of seven series for an aggregate purchase price (excluding accrued interest) for all series of up to £1 billion in cash.

The following series, listed in order of acceptance priority level, are covered by the tender offers:

• £650 million outstanding 2.25% guaranteed notes due 2052 (ISIN: XS1488409977) issued by BAT International, with pricing to be based on the 3.75% U.K. Treasury due July 22, 2052 and a fixed spread of 175 basis points;

• £350 million outstanding 4% guaranteed notes due 2055 (ISIN: XS1324911608) issued by BAT International, with pricing to be based on the 4.25% U.K. Treasury due Dec. 7, 2055 and a fixed spread of 180 bps;

• €600 million outstanding 2% guaranteed notes due 2045 (ISIN: XS1203860934) issued by BAT International, with pricing to be based on the interpolated mid-swap rate and a fixed spread of 145 bps;

• $1 billion outstanding 3.984% notes due 2050 (ISIN: US05526DBU81) issued by BAT Capital, with pricing to be based on the 4.75% U.S. Treasury due Nov. 15, 2053 and a fixed spread of 160 bps;

• $750 million outstanding 3.734% notes due 2040 (ISIN: US05526DBT19) issued by BAT Capital, with pricing to be based on the 4.5% U.S. Treasury due Feb. 15, 2044 and a fixed spread of 155 bps;

• $2.5 billion outstanding 4.54% notes due 2047 (ISIN: US05526DBF15) issued by BAT Capital, with pricing to be based on the 4.5% U.S. Treasury due Feb. 15, 2044 and a fixed spread of 165; and

• $1 billion outstanding 4.758% notes due 2049 (ISIN: US05526DBK00) issued by BAT Capital, with pricing to be based on the 4.75% U.S. Treasury due Nov. 15, 2053 and a fixed spread of 170 bps.

The total consideration will include an early tender premium of £50, €50 or $50 per £1,000, €1,000 or $1,000 principal amount, respectively, payable to holders whose notes are tendered by the early tender deadline and accepted for purchase.

In addition, the offerors will also pay accrued interest.

Tenders may be subject to proration.

The early tender deadline is 5 p.m. ET on April 26, which is also the withdrawal deadline.

Pricing will be determined at 10 a.m. ET on April 29.

Early settlement is expected to occur on May 1.

The offers will expire at 5 p.m. ET on May 13.

Final settlement will be on May 15.

The tender offers are not conditioned on any minimum amount being tendered.

The offerors said they reserve the right to waive any and all conditions to the tender offers, extend or terminate the offers, increase or decrease the maximum tender amount or otherwise amend the offers in any way.

Citigroup Global Markets Ltd. (+44 20 7986 8969, 800 558-3745 or 212 723-6106; liabilitymanagement.europe@citi.com), Merrill Lynch International (+44 20 7996 5420, 888 292-0070 or 980 387-3907; DG.LM-EMEA@bofa.com), NatWest Markets plc (+44 20 7678 5222, 800 231-5380 or 203 897-6166; NWMliabilitymanagement@natwestmarkets.com) and SMBC Nikko Capital Markets Ltd. (+44 20 4507 5043; liability.management@smbcnikko-cm.com) are dealer managers in connection with the tender offers.

The information and tender agent is Global Bondholder Services Corp. (https://www.gbsc-usa.com/bata/; 212 430-3774 for banks and brokers or 855 654-2014; contact@gbsc-usa.com).

British American Tobacco is a London-based international tobacco company.

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