News
TSASC, INC. ANNOUNCES $653 MILLION TOBACCO SETTLEMENT BOND SALE
TSASC, Inc. (“TSASC”) announced today the sale of approximately $653 million Tobacco Settlement Bonds, comprised of $613 million of Senior Bonds and $40 million of Subordinate Serial Bonds. Proceeds from the sale will be used to refund TSASC’s outstanding bonds.
The Senior Bonds have maturity dates ranging from 2017 – 2041, while the Subordinate Serial Bonds have maturity dates ranging from 2018 – 2025.
During the order period, approximately $3.5 billion of institutional orders were received, representing an oversubscription of 5.3x the bonds being offered. Given the strong investor demand, final yields for the Senior Bonds were reduced by 3 – 8 basis points for the 2017 – 2019 maturities and 10 – 13 basis points for the 2020 – 2041 maturities. Yields were also reduced by 5 basis points for the Subordinate Serial Bonds. Final stated yields ranged from 1.22% to 4.43% for the Senior Bonds, and 2.02% to 3.76% for the Subordinate Serial Bonds.
The bonds were sold via negotiated sale through TSASC’s syndicate, led by book-running lead manager Jefferies, with Citigroup and Siebert Cisneros Shank & Co., L.L.C. serving as co-lead managers on the transaction.
In conjunction with today’s sale, TSASC also placed $450 million of Subordinate Turbo Term Bonds with holders of existing TSASC bonds. The Subordinate Turbo Term Bonds have a 5% coupon and a turbo redemption feature which allows TSASC to redeem the bonds before their stated maturities in 2045 and 2048.