With the 80% of eligible Marriott Corp. debt tendered so far -- just shy of the company's 85% threshold -- Marriott yesterday announced plans to extend its exchange offer.
The offer's deadline is now set for tomorrow at 5 p.m., eastern daylight time. The original deadline was Tuesday, said Nick Hill, a Marriott spokesman.
The extension is designed to give bondholders "an opportunity to exchange some more of their bonds," Hill said. In addition to its tender threshold of at least 85% of the principal amount of all series, he said, Marriott announced earlier that it is seeking 51% of the principal amount of each class.
Roughly $1.2 billion of $1.525 billion of publicly held senior notes and debentures eligible under the exchange and been tendered by Tuesday, according to a Marriott release. The notes and debentures eligible for the exchange offer mature between 1995 and 2012.
"We're pleased so far with the results," Hill said. He declined to say what the company will do if it fails to achieve the 85% or 51% thresholds.
"I can't speculate on what we're going to do," he said.
One analyst, when asked whether she though the exchange offer would go through, replied, "I think it still looks good ... I think we're going to see more bondholders tender."
She noted that the biggest holdouts appeared to be the 9% Series I debt holders, with holders of only 13% of the total amount agreeing to tender. The analyst, who preferred to remain unidentified, believes it would be in the bondholders' best interest to tender their securities.
"That's an economic decision that I would recommend," she said.
Tenders were received for approximately the following amounts of each series: $88 million or 88% of the 9 5/8% Series B due 1996; $133 million or 67% of the 8 1/8% Series C due 1996; $80 million or 80% of the 8 7/8% Series D due 1997; $131 million or 87% of the 9 7/8% Series E due 1997; $46 million or 46% of the 9 1/8% Series F due 1995; $13 million or 13% of the 9% Series I due 1995; $116 million or 93% of the 10 1/4% Series K due 2001; $187 or 94% of the 10% Series L due 2012; $183 million or 92% of the 9 1/2% Series M due 2002; and $239 million or 96% of the 9 3/8% debentures due 2007.
The exchange offer hinges on completion of Marriott's special dividend transaction. The company's board of directors established Sept. 1 as the date or record for the transaction, and Sept. 10 as the distribution date.
"The exchange offer and the special dividend transaction are expected to occur contemporaneously, but Marriott intends to proceed with the special dividend regardless of whether the exchange offer is consummated," the release says.
In other news, NationsBank Corp. boosted the 10-year portion of Tuesday's blockbuster offering to $600 million yesterday following strong demand, the banking company said in a release.
The move adds another $50 million to the offering, bringing the total to $1 billion.
The deal also had a three-year tranche consisting of $400 million of senior notes.
The country's fifth largest banking company, NationsBank has $124 billion in assets.
In secondary trading yesterday, high-yields ended unchanged over all, while Allnet Communication's 9% debt climbed 1/2 point. Spreads on high-grade issues widened two to three basis points as prices in the government market climbed and the inventory of the past week continued to mount.
Federal National Mortgage Association issued $500 million of 3.45% medium-term notes due 1994 at par. The notes are noncallable. Goldman, Sachs & Co. was sole manager.
International Semi-Tech Microelectronics Inc. issued a zero coupon offering with $300 million of proceeds. The notes have a 10-year final maturity and are zero coupon for seven years. Noncallable for five years, the notes were priced at 45.858 and have a 11.5% yield to maturity. Kidder, Peabody & Co. was sole manager.
Federal National Mortgage Association issued $200 million of 6.31% medium-term notes due 2003 at par. Noncallable for a year, the notes were priced to yield 63 basis points over comparable Treasuries. Lehman Brothers was sole manager.
Federal Home Loan Mortgage Corp. issued $200 million of 3.95% debentures due 1996. The debentures are noncallable for a year, after which the coupon steps up to 4.75%. Lehman Brothers was sole manager.
Duke Power Co. issued $150 million of first and refunding mortgage bonds due 2025. Noncallable for five years, the bonds were priced at 96.819 to yield 7% of 73 basis points over 30-year Treasuries. Fitch Investors Service Inc. rates the offering AA and Moody's Investors Service rates it Aa2, while Standard & Poor's Corp. and Duff & Phelps Credit Rating Co. rate it AA-minus. Salomon Brothers won competitive bidding to underwrite the offering.
Federal Farm Credit Bank $135 million of 4.40% notes due 1996 at par. Noncallable for a year, the notes were priced to yield four basis points over comparable Treasuries. Merrill Lynch & Co. sole-managed the offering.
Boston Edison Co. issued $100 million of 6.05% debentures due 2000. The noncallable debentures were priced at 99.935 to yield 6.061% of 65 basis points over the 8.75% Treasuries of 2000. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB. Duff & Phelps rates it BBB-plus. Goldman Sachs lead-managed the offering.
Carolina Power & Light Co. issued $100 million of 6.875% first mortgage bonds due 2023. Noncallable for 10 years, the bonds were priced at 98.812 to yield 6.97% or 70 basis points more than 30-year Treasuries. Moody's rates the offering A2, Standard & Poor's rates it A, and Duff & Phelps rates it A-plus. Kidder Peabody & Co. won competitive bidding to underwrite the offering.
ShopKo Stores Inc. issued $100 million of 6.50% notes due 2003. The noncallable notes were priced at 99.722 to yield 6.538% or 85 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB-plus. Goldman, Sachs was lead manager.
J.B. Hunt Transport Services Inc. issued $100 million of 6.250% notes due 2003. The noncallable notes were priced at 99.68 to yield 6.294% or 60 basis points over comparable Treasuries. Moody's rates the offering A3, while Standard & Poor's rates it A. Merrill Lynch lead-managed the offering.
Enron issued $100 million of 7% debentures due 2023. Noncallable for 10 years, the debentures were priced at 98.15 to yield 7.151 or 87.5 basis points over comparable Treasuries. Merrill Lynch and Donaldson, Lufkin & Jenrette Securities Corp. co-lead managed the offering. Moody's rates the debentures Baa2, while Standard & Poor's and Duff & Phelps rate them BBB.