TIDMBATS TIDM59BX TIDM76PL

RNS Number : 2967B

British American Tobacco PLC

06 October 2020

PRESS RELEASE

British American Tobacco Announces Pricing of Its Previously Announced Debt Tender Offer

London, United Kingdom; October 6, 2020 - British American Tobacco p.l.c. ("BAT") announces today the pricing of the previously announced debt tender offers (the "Tender Offer") to purchase the debt securities listed in the table below (collectively, the "Securities") by B.A.T Capital Corporation, a corporation incorporated in the State of Delaware ("BATCAP"), B.A.T. International Finance p.l.c., a public limited company incorporated under the laws of England and Wales ("BATIF"), and Reynolds American Inc., a corporation incorporated in the State of North Carolina ("RAI" and, together with BATCAP and BATIF, the "Offerors"), wholly owned subsidiaries of BAT.

As of 5:00 p.m., New York City time, on October 5, 2020 (the "Early Tender Deadline"), as reported by Global Bondholder Services Corporation, the tender and information agent for the Tender Offer, the principal amounts of the Securities listed in the table below had been validly tendered and not validly withdrawn.

The following table sets forth certain pricing information for the Tender Offer, including the Total Consideration determined, in the case of Dollar Securities and Sterling Securities, based on yields of the applicable Reference Securities at 10:00 a.m., New York City time, today: 


 
 Issuer of 
Security /                                                   Principal       Principal       Principal     Acceptance    Early                                    Total 
Applicable                                                     Amount          Amount          Amount       Priority     Tender    Reference   Fixed Spread   Consideration 
  Offeror    Title of Security          CUSIP/ISIN          Outstanding       Tendered        Accepted       Level     Premium(1)    Yield    (basis points)     (1)(2)        Sub-Cap(3) 
-----------  ------------------  ------------------------  --------------  --------------  --------------  ----------  ----------  ---------  --------------  -------------  ------------ 
                                        05530QAL4/ 
             3.500% Guaranteed    US05530QAL41/G08820CJ2/ 
   BATIF       Notes due 2022          USG08820CJ26          $500,000,000   $267,599,000    $267,599,000       1          $30       0.146%          20         $ 1,052.98        N/A 
               3.250% Senior            761713AX4/ 
    RAI        Notes due 2022          US761713AX48          $158,484,000   $90,205,000     $90,205,000        2          $30       0.146%          25         $ 1,058.60        N/A 
              2.764% Notes due          05526DAV7/ 
  BATCAP            2022               US05526DAV73        $2,250,000,000  $1,649,091,000  $1,649,091,000      3          $30       0.146%          30         $ 1,040.81        N/A 
                                        05530QAF7/ 
             3.250% Guaranteed    US05530QAF72/G08820BX2/ 
   BATIF       Notes due 2022          USG08820BX29          $900,000,000   $481,425,000    $481,425,000       4          $30       0.149%          30         $ 1,046.38        N/A 
               4.000% Senior            761713BF2/ 
    RAI        Notes due 2022          US761713BF23        $1,000,000,000   $703,078,000    $703,078,000       5          $30       0.149%          30         $ 1,059.28        N/A 
             6.000% Guaranteed 
   BATIF       Notes due 2022          XS0436059843        GBP250,000,000  GBP102,900,000  GBP70,050,000       6         GBP30      -0.029%         55        GBP 1,093.71   $100 million 
             3.625% Guaranteed                                                                                                                                               As described 
   BATIF       Notes due 2021          XS0704178556        EUR600,000,000  EUR228,337,000  EUR100,000,000      7         EUR30        N/A          N/A         EUR1,041.68   herein

(1) Per $1,000, GBP1,000 or EUR1,000, as applicable, principal amount of Securities validly tendered at or prior to the Early Tender Deadline and accepted for purchase.

(2) For the avoidance of doubt, the Early Tender Premium is included within the Total Consideration (which, in the case of all Securities, except for the 2021 Euro BATIF Notes, was calculated using the Fixed Spread over the relevant Reference Yield as described herein), and is not in addition to the Total Consideration.

(3) To determine whether the Maximum Tender Amount or any Sub-Cap has been reached, we converted the applicable purchase price payable with respect to the Sterling Securities and Euro Securities validly tendered and not validly withdrawn prior to the Early Tender Deadline into U.S. Dollars using the exchange rates of GBP/$1.2962 and EUR/$1.1783, respectively, reported as set forth under "The Terms of the Offer - Maximum Tender Amount; Sub - Caps; Acceptance Priority Levels and Proration." in the Offer to Purchase .

The amount of each series of Securities that is purchased in the Tender Offer on the Early Settlement Date (as defined below) is determined in accordance with the acceptance priority levels specified in the table above (the "Acceptance Priority Level"), with 1 being the highest Acceptance Priority Level and 7 being the lowest Acceptance Priority Level, subject to the Maximum Tender Amount and the Sub-Caps, increased as announced earlier today (as applicable) and as described in more detail in the Offer to Purchase (as defined below).

The maximum aggregate purchase price that the Offerors will pay in the Tender Offer is an amount that is sufficient to allow the Offerors to purchase (x) the entire principal amounts of the Dollar Securities in Acceptance Priority Levels 1 through 5 specified in the table above validly tendered and not validly withdrawn prior to the Early Tender Deadline, (y) approximately $100 million equivalent principal amount of 2022 Sterling BATIF Notes validly tendered and not validly withdrawn prior to the Early Tender Deadline and (z) EUR100 million aggregate principal amount of 2021 Euro BATIF Notes validly tendered and not validly withdrawn prior to the Early Tender Deadline. Based on the pricing set forth above, this amount is approximately $3.564 billion (excluding accrued and unpaid interest).

The Tender Offer is being made upon and is subject to the terms and conditions set forth in the Offer to Purchase, dated September 22, 2020 (as amended by Supplement No. 1, dated September 30, 2020 and the press release issued by BAT earlier today, the "Offer to Purchase"). The Tender Offer will expire at 11:59 p.m., New York City time, on October 20, 2020, unless extended or earlier terminated (the "Expiration Date"). However, because the aggregate purchase price of all series of Securities validly tendered in the Tender Offer at or prior to the Early Tender Deadline exceeds the Maximum Tender Amount, the Offerors will not accept for purchase any Securities tendered after the Early Tender Deadline and at or prior to the Expiration Date. In addition, because the 2022 Sterling BATIF Notes Sub-Cap and the 2021 Euro BATIF Notes Sub-Cap have been reached as of the Early Tender Deadline, holders who validly tender 2022 Sterling BATIF Notes or 2021 Euro BATIF Notes following the Early Tender Deadline will not have any such Securities accepted for purchase. The Withdrawal Deadline was 5:00 p.m., New York City time, on October 5, 2020; therefore, Securities that have been validly tendered and not validly withdrawn may not be withdrawn unless otherwise required by applicable law.

The applicable Offerors plan to accept all Securities validly tendered and not validly withdrawn prior to the Early Tender Deadline with Acceptance Priority Levels 1 through 5, Securities validly tendered and not validly withdrawn prior to the Early Tender Deadline with Acceptance Priority Level 6 using a proration factor of approximately 70% in accordance with the Offer to Purchase and Securities validly tendered and not validly withdrawn prior to the Early Tender Deadline with Acceptance Priority Level 7 using a proration factor of approximately 41.87% in accordance with the Offer to Purchase. Securities not accepted for purchase will be promptly returned or credited to the Holder's account.

Holders of Securities who validly tendered and did not validly withdraw their Securities at or prior to the Early Tender Deadline and whose Securities were accepted for purchase will receive the applicable Total Consideration, which includes the applicable early tender premium specified in the table above (the "Early Tender Premium").

The applicable Total Consideration for Securities denominated in U.S. Dollars, Sterling and Euro will be paid in U.S. Dollars, Sterling and Euro, respectively. Acceptance of Securities with reference to the Maximum Tender Amount and each Sub-Cap has been determined subject to the currency conversion methods described in the Offer to Purchase.

In addition to the applicable Total Consideration, accrued and unpaid interest from and including the most recent interest payment date applicable to the relevant series of Securities up to, but not including, the Early Settlement Date will be paid in cash on all validly tendered Securities accepted for purchase.

Each Offeror's obligation to accept for payment and pay for the Securities validly tendered in the Tender Offer is subject to the satisfaction or waiver of the conditions described in the Offer to Purchase.

Securities that are accepted in the Offer will be purchased by the applicable Offeror and retired and canceled and will no longer remain outstanding obligations of the applicable Offeror.

The settlement date for the Securities that have been validly tendered at or prior to the Early Tender Deadline and accepted for purchase is expected to be October 8, 2020 (the "Early Settlement Date").

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