Saturday, October 7, 2017

Wal-Mart Stores, Inc. Announces Cash Tender Offer for Certain of its Outstanding Debt Securities

Press Release


BENTONVILLE, Ark.--()--Wal-Mart Stores, Inc. (NYSE: WMT) (“Walmart,” the “Company,” “we” or “us”) announced today that it has commenced a cash tender offer for up to $8,500,000,000 aggregate purchase price, including principal, premium and the Early Participation Amount (as defined below), but excluding Accrued Interest (as defined below) (the “Maximum Amount”), of the debt securities listed in Table I below (collectively, the “Securities”) (such offer to purchase, the “Tender Offer”), plus accrued and unpaid interest on the applicable series of Securities from, and including, the most recent interest payment date for such series of Securities prior to the applicable Payment Date (as defined below) to, but not including, the applicable Payment Date (“Accrued Interest”). The Maximum Amount will not be subject to amendment by Walmart.
The Tender Offer is made upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 6, 2017 (as it may be amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer Documents”).
Capitalized terms used in this announcement but not defined have the meanings given to them in the Offer to Purchase.

(1) Per $1,000 principal amount of Securities.
(2) The Total Consideration payable for each series of Securities includes the Early Participation Amount and will be a price per $1,000 principal amount of such series of Securities validly tendered in the Tender Offer at or prior to the Early Participation Date for the Tender Offer and accepted for purchase by us and is calculated using the applicable Fixed Spread. Holders whose Securities are accepted will also receive Accrued Interest on such Securities. The Hypothetical Total Consideration shown in this table assumes settlement on the expected Early Payment Date and the Reference Yield measured at 10:00 a.m., New York City time, on October 6, 2017, as determined by the Pricing Joint Lead Dealer-Managers (as defined below) (see Schedule B to the Offer to Purchase).
(3) For such series of Securities, the calculation of the applicable Total Consideration will be performed taking into account the par call date. See Schedule A to the Offer to Purchase for an overview of the calculation of the Total Consideration (including the par call detail).
Rationale for the Tender Offer
We are making the Tender Offer to purchase certain outstanding debt securities issued by Walmart to reduce our interest expense. Securities that are accepted in the Tender Offer will be purchased, retired and canceled by Walmart and will no longer remain outstanding obligations of Walmart.
“As we did with the transaction we completed in July, this Tender Offer allows us to take advantage of the favorable interest rate environment and reduce our interest expense prospectively. We expect to record a charge for this discrete item upon completion of this Tender Offer just as we did for the July transaction,” said Brett Biggs, Executive Vice President and Chief Financial Officer.
Details of the Tender Offer
The Tender Offer will expire at 11:59 p.m., New York City time, on November 3, 2017, unless such deadline is extended or, subject to applicable law, the Tender Offer is earlier terminated by the Company (such date and time, as the same may be extended, the “Expiration Date”). Securities tendered at or prior to the applicable Early Participation Date (as defined below) may be withdrawn at any time at or prior to 5:00 p.m., New York City time, on October 20, 2017, unless that deadline for withdrawal is extended by the Company in its sole and absolute discretion (such date and time, as the same may be extended, the “Withdrawal Date”), but not thereafter unless otherwise required by applicable law.
The Company will accept for payment, and thereby purchase, all Securities validly tendered (and not subsequently validly withdrawn) pursuant to the Tender Offer at or prior to the Expiration Date, subject to the Maximum Amount and based on the acceptance priority levels set forth in Table I above (the “Acceptance Priority Levels”), and subject to proration (if applicable), provided that Securities tendered at or prior to the Early Participation Date will be accepted for purchase in priority to Securities tendered after the Early Participation Date, but at or prior to the Expiration Date, regardless of the priority of the series of such later tendered Securities.
Holders of Securities that are validly tendered at or prior to 5:00 p.m., New York City time, on October 20, 2017, unless extended by the Company in its sole and absolute discretion (such date and time, as the same may be extended, the “Early Participation Date”), and not subsequently validly withdrawn, and accepted for purchase by the Company will receive the applicable Total Consideration (as defined below) for their Securities, together with any Accrued Interest. The Total Consideration payable for each series of Securities includes the early participation amount applicable to such series of Securities, as set forth in Table I above (the “Early Participation Amount”). Holders validly tendering their Securities after the Early Participation Date, but at or prior to the Expiration Date, will only be eligible to receive the applicable “Tender Offer Consideration,” which is an amount equal to the applicable Total Consideration less the Early Participation Amount. Holders will also be paid any Accrued Interest in respect of their Securities purchased in the Tender Offer.
The Tender Offer is subject to certain conditions, including the condition that Walmart have on the Early Payment Date funds, from one or more sources reasonably satisfactory to Walmart, in an amount equal to the Maximum Amount plus the Accrued Interest payable in the Tender Offer. Subject to the Company’s right to terminate the Tender Offer, as described below, and subject to the Maximum Amount and based on the Acceptance Priority Levels and proration, the Company will purchase in the Tender Offer (i) the Securities that have been validly tendered (and not subsequently validly withdrawn) in the Tender Offer at or prior to the Early Participation Date, subject to all conditions to the Tender Offer having been satisfied or waived by the Company, promptly following such Early Participation Date (the date of such purchase, which is expected to be October 24, 2017, the second business day following the Early Participation Date, the “Early Payment Date”), and (ii) to the extent that Securities are purchased in the Tender Offer on the Early Payment Date for an aggregate purchase price that is less than the Maximum Amount, the Securities that have been validly tendered after the Early Participation Date, but at or prior to the Expiration Date, subject to all conditions to the Tender Offer having been satisfied or waived by the Company, promptly following the Expiration Date (the date of such purchase, which is expected to be November 6, 2017, the first business day following the Expiration Date, the “Final Payment Date,” and together with the Early Payment Date, each a “Payment Date”). If, on the applicable Early Payment Date, Securities are purchased in the Tender Offer for an aggregate purchase price that is equal to the Maximum Amount for the Tender Offer, no additional Securities will be purchased in the Tender Offer, and there will be no Final Payment Date.
The “Total Consideration” payable for each series of Securities will be a price per $1,000 principal amount of such series of Securities validly tendered at or prior to the Early Participation Date, and accepted for purchase by the Company (subject to the Maximum Amount, the Acceptance Priority Levels and to proration, if any) equal to an amount, calculated in accordance with Schedule A to the Offer to Purchase that would reflect, as of the Early Payment Date, a yield to the applicable maturity date or par call date (as applicable) of such series of Securities equal to the sum of (i) the Reference Yield (as defined below) of the applicable Reference Security (as defined below) for such series of Securities, determined at 10:00 a.m. (New York City time) on October 23, 2017 (as such date may be extended by us, the “Reference Yield Determination Date”), by the Pricing Joint Lead Dealer-Managers, plus (ii) the fixed spread applicable to such series of Securities, as set forth in Table I above (the “Fixed Spread”), in each case, excluding Accrued Interest. The applicable Total Consideration includes the Early Participation Amount. The “Reference Yield” means, with respect to each series of Securities, the yield of the applicable reference security listed in Table I above (the “Reference Security”) based on the bid side price of the applicable Reference Security for such series as displayed on the applicable reference page set forth in Table I above as of the Reference Yield Determination Date.
For further details about the procedures about tendering the Securities, please refer to the Offer Documents, including the procedures set out under the heading “The Tender Offer—Procedures for Tendering Securities” in the Offer to Purchase.
 
Indicative Timetable for Each Tender Offer
 
Event
     
Calendar Date and Time
 
Commencement October 6, 2017
 
Early Participation Date 5:00 p.m., New York City time, on October 20, 2017, unless extended by the Company in its sole and absolute discretion.
 
Withdrawal Date 5:00 p.m., New York City time, on October 20, 2017, unless extended by the Company in its sole and absolute discretion.
 
Announcement of Results of Early Participation
As soon as reasonably practicable after the Early Participation Date.
 
Reference Yield Determination Date 10:00 a.m., New York City time, on October 23, 2017, unless extended by the Company in its sole and absolute discretion.
 
Early Payment Date Promptly following the Early Participation Date (expected to be on or about October 24, 2017), subject to the satisfaction or waiver of the conditions to the Tender Offer.
 
Expiration Date 11:59 p.m., New York City time, on November 3, 2017, unless, extended by the Company or, subject to applicable law, the Tender Offer is earlier terminated by the Company, in each case, in its sole and absolute discretion.
 
Final Payment Date Promptly following the Expiration Date (expected to be on or about November 6, 2017), subject to the satisfaction or waiver of the conditions to the Tender Offer and assuming additional Securities may be purchased in the Tender Offer on such date without the Maximum Amount being exceeded.
 
The Company reserves the right, in its sole discretion, not to accept any tendered Securities, not to purchase any Securities and to extend, re-open, withdraw or terminate the Tender Offer and to amend or waive any of the terms and conditions of the Tender Offer in any manner, subject to applicable law. The Tender Offer is not conditioned on any minimum amount of Securities being tendered in the Tender Offer.
Holders are advised to check with any bank, securities broker or other intermediary through which they hold the Securities when such intermediary would require to receive instructions from a holder in order for that the holder to be able to participate in the Tender Offer before the deadlines specified above. The deadlines set by any such intermediary and The Depository Trust Company (“DTC”) for the tender of Securities will be earlier than the relevant deadlines specified above.
Copies of all announcements, press releases and notices can also be obtained from the Information Agent, the contact details for whom are set out below. Significant delays may be experienced where notices are delivered to DTC and holders are urged to contact the Information Agent for the relevant announcements relating to the Tender Offer.
Holders are advised to read carefully the Offer Documents for full details of and information on the procedures for participating in the Tender Offer.
Credit Suisse Securities (USA) LLC (“Credit Suisse”), Goldman Sachs & Co. LLC (“Goldman Sachs”), Wells Fargo Securities, LLC (“Wells Fargo Securities” and, together with Credit Suisse and Goldman Sachs, the “Pricing Joint Lead Dealer-Managers”), BNP Paribas Securities Corp., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are acting as joint lead dealer-managers (such banks together with the Pricing Joint Lead Dealer-Managers, the “Joint Lead Dealer-Managers”), Barclays Capital Inc. HSBC Securities (USA) Inc., Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., Santander Investment Securities Inc., Standard Chartered Bank and U.S. Bancorp Investments, Inc. are acting as senior co-dealer-managers (the “Senior Co-Dealer-Managers”) and CastleOak Securities, L.P. and Samuel A. Ramirez & Company, Inc. are acting as co-dealer managers (collectively, with the Joint Lead Dealer-Managers and the Senior Co-Dealer-Managers, the “Dealer-Managers”) in connection with the Tender Offer. Global Bondholder Services Corporation is acting as information agent (the “Information Agent”) and depositary (the “Depositary”) in connection with the Tender Offer.

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