Discover Financial Services (DFS) unveiled some details of
private offers to exchange two series of debt that come due in 2017
and 2019 for new debt that matures in 2022 and cash.
Many companies have been taking advantage of historically low
interest rates to refinance their borrowings to push out debt
maturities and improve balance sheets.
In the first part of the offer, Discover is seeking to exchange
$400 million in outstanding principal of its 10.25% senior notes
that mature in 2019. If the offer results in $250 million or more
of new notes being issued, Discover said, none of the notes in the
second series will be accepted.
The second part of the exchange offer includes up to $50 million
of its 6.45% senior notes that come due in 2017, or the difference
between $250 million and the amount of new notes issued in the
other exchange, whichever is the lesser. There are about $400
million of the 6.45% notes outstanding.
Discover is offering an early tender premium of $50 per $1,000
of face value. Further terms of the offer weren't provided.
Last month, lower late payments and increased card use helped
Discover Financial post a 36% increase in fiscal first-quarter
profit that beat analysts' estimates.
Shares were down 1% at $32.75 in recent trading amid a broad
market downturn. The stock has risen about 36% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com