PITTSBURG, Kan., July 8, 2024
/PRNewswire/ -- Watco Companies, L.L.C. and its wholly-owned
subsidiary, Watco Finance Corp. (collectively, the "Company"),
today announced that it has commenced a cash tender offer to
purchase (the "Offer") any and all of the outstanding 6.500% Senior
Notes due 2027 (the "2027 Notes") as set forth in the table
below.
Series of
Notes
|
CUSIP
Numbers(1)
|
Aggregate
Principal
Amount
Outstanding
|
U.S. Treasury
Reference
Security(2)
|
Bloomberg
Reference
Page(2)
|
Fixed
Spread(2)
|
6.500% Senior
Notes due 2027
|
941130AB2/
U94127AB0
|
$600,000,000
|
2.875% U.S.
Treasury due
June 15, 2025
|
FIT3
|
0 bps
|
(1) No representation is made as to the correctness or accuracy
of the CUSIP numbers listed in this press release or printed on the
2027 Notes. It is provided solely for the convenience of Holders of
the Notes.
(2) The consideration (the "Consideration") payable per
$1,000 principal amount of 2027 Notes
validly tendered and accepted for purchase will be based on the
fixed spread specified in the table above (the "Fixed
Spread"), plus the yield to maturity of the U.S. Treasury
Reference Security (the "Reference Yield") based on the
bid-side price of the U.S. Treasury Reference Security specified
above (the "Reference Page") at 11:00
a.m., New York City time,
on July 17, 2024 (such date as it may
be extended, the "Price Determination Date"). The sum of the
Fixed Spread and the Reference Yield is referred to as the
"Repurchase Yield." The Consideration does not include Accrued
Interest (as defined in the Offer to Purchase), which will be paid
on 2027 Notes accepted for purchase by the Company as described
herein. The formula for determining the Consideration and Accrued
Interest is set forth on Annex A of the Offer to Purchase (as
defined below).
The Offer is being made solely pursuant to the terms and
conditions set forth in an Offer to Purchase, dated July 8, 2024 (the "Offer to Purchase"). Holders
of the 2027 Notes are urged to carefully read the Offer to Purchase
before making any decision with respect to the Offer. There is no
letter of transmittal for the Offer. The Offer is not conditioned
on any minimum amount of the 2027 Notes being tendered. Subject to
applicable law, the Company may amend, extend or terminate the
Offer in its sole discretion. Capitalized terms used but not
defined in this announcement have the meanings given to them in the
Offer to Purchase.
The Offer will expire at 5:00 p.m.
New York City time on July 17, 2024, unless extended or terminated by
the Company (such time and date, as the same may be extended or
terminated by the Company in its sole discretion, subject to
applicable law the "Expiration Date"). Tendered Notes may be
withdrawn at any time (i) at or prior to the earlier of (x) the
Expiration Date and (y) in the event that the Offer is extended,
the tenth business day after commencement of the Offer, and (ii)
after the 60th business day after commencement of the Offer if for
any reason the Offer has not been consummated within 60 business
days after commencement (such time and date, as the same may be
extended by us in our sole discretion, the "Withdrawal Deadline"),
but may not thereafter be validly withdrawn, unless otherwise
required by applicable law.
Holders of the 2027 Notes must validly tender their 2027 Notes,
or submit a Notice of Guaranteed Delivery and comply with the
related procedures, prior to the Expiration Date, and not validly
withdraw their 2027 Notes prior to the Withdrawal Deadline, in
order to be eligible to receive the Consideration. There is no
letter of transmittal for the Offer. Accrued and unpaid interest
will be paid on all 2027 Notes validly tendered and accepted for
purchase from the last interest payment date up to, but not
including, the settlement date, which is expected to be on or about
July 22, 2024. On the Price
Determination Date, unless extended, the Company will issue a press
release specifying, among other things, the Consideration for the
2027 Notes validly tendered and accepted. For Holders who deliver a
Notice of Guaranteed Delivery and all other required documentation
at or prior to the Expiration Date, upon the terms and subject to
the conditions set forth in the Offer to Purchase (including the
Financing Condition and the General Conditions), the deadline to
validly tender their 2027 Notes using the guaranteed delivery
procedures will be the second business day after the Expiration
Date and is expected to be 5:00 p.m.,
New York City time, on
July 19, 2024.
The purpose of the Offer is to acquire all outstanding 2027
Notes. The Company intends to fund the Offer with the net proceeds
from a concurrent senior notes offering, and the Offer is
conditioned upon the successful completion of such notes
offering.
The Company has retained Wells Fargo Securities to act as the
dealer manager and D.F. King & Co., Inc. to act as the tender
and information agent for the Offer. For additional information
regarding the terms of the Offer, please contact Wells Fargo
Securities at +1 (866) 309-6316 (toll-free), (704) 410-4759
(collect) or liabilitymanagement@wellsfargo.com. Requests for
copies of the Offer to Purchase and questions regarding the
tendering of 2027 Notes may be directed to D.F. King & Co.,
Inc. at (212) 269-5550 (for banks and brokers) or (800) 283-9185
(all others, toll-free) or email watco@dfking.com. The Offer to
Purchase, and the related Notice of Guaranteed Delivery are
available at the following website: www.dfking.com/watco.
None of the Company, the Dealer Manager, the Tender and
Information Agent or the trustee (nor any director, officer,
employee, agent or affiliate of, any such person) makes any
recommendation whether Holders should tender or refrain from
tendering 2027 Notes in the Offer, and no one has been authorized
by any of them to make such a recommendation. Holders must make
their own decision as to whether to tender their 2027 Notes and, if
so, the principal amount of the 2027 Notes to tender.
This press release is for informational purposes only and does
not constitute an offer to sell, or a solicitation of an offer to
buy, any security. No offer, solicitation or sale will be made in
any jurisdiction in which such an offer, solicitation, or sale
would be unlawful. The Offer is only being made pursuant to the
Offer to Purchase. Holders of the 2027 Notes are urged to carefully
read the Offer to Purchase before making any decision with respect
to the Offer.
About Watco Companies, L.L.C.
Watco, headquartered in Pittsburg,
Kansas, is a leading provider of integrated transportation
services, providing a broad set of supply chain solutions. Watco
provides short line railroad, terminal and port, and logistics
services to over 3,500 customers across the U.S., Mexico, Canada and Australia. Watco owns and operates a diverse
portfolio of transportation infrastructure assets across
North America which includes being
the second largest short line railroad operator (by mileage) and,
according to Watco internal estimates, one of the largest bulk and
break bulk terminaling services providers. More information about
Watco and its subsidiaries can be found at www.watco.com
Forward-Looking Statements
This press release includes forward-looking statements. These
forward-looking statements are identified as any statement that
does not relate strictly to historical or current facts. They use
words such as "anticipate," "believe," "intend," "plan," "project,"
"forecast," "strategy," "position," "continue," "estimate,"
"expect," "may," or the negative of those terms or other variations
of them or comparable terminology. In particular, statements,
express or implied, concerning the timing for the closing of the
Offer and the satisfaction of the conditions to the closing of the
Offer are forward-looking statements. All statements other than
statements of historical or current facts included in this press
release that address activities, events, or developments that are
expected, believed, or anticipated to occur or that may occur in
the future are forward-looking statements.
Forward-looking statements are based on the Company's current
expectations and beliefs concerning future events affecting the
Company, and are subject to uncertainties and factors relating to
the Company's operations and business environment, all of which are
difficult to predict and many of which are beyond the Company's
control. Although the Company believes that the expectations
reflected in the forward-looking statements are reasonable, the
Company does not know whether its expectations will prove correct.
Any or all of the forward-looking statements in this press release
may turn out to be wrong. They can be affected by inaccurate
assumptions or by known or unknown risks and uncertainties. There
are a number of factors that could cause the Company's actual
results to differ materially from those indicated in these
statements.
The information set forth herein speaks only as of the date
hereof, and the Company undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
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SOURCE Watco Companies, LLC