NEW CASTLE, Del.--(BUSINESS WIRE)--Oct. 19, 2012--
Discover Bank (the “Bank”) announced today the commencement of a private
offer to exchange its outstanding subordinated notes as set forth in the
table below (the “Bank Notes”) for new senior notes of its parent
company Discover Financial Services (“DFS”) due November 21, 2022 (the
“DFS Notes”) and cash (the “Exchange Offer”).
The Exchange Offer is being conducted by the Bank upon the terms and
subject to the conditions set forth in a confidential offering
memorandum, dated October 19, 2012, and related letter of transmittal.
The Exchange Offer is only extended, and copies of the offering
documents will only be made available, to a holder of Bank Notes that
has certified its status as (1) a “Qualified Institutional Buyer” as
defined in Rule 144A under the Securities Act of 1933 (the “Securities
Act”) or (2) (A) a person who is not a “U.S. person” as defined in
Regulation S under the Securities Act and (B) if resident and/or located
in any Member State of the European Economic Area which has implemented
provisions of the Directive 2003/71/EC (as amended, including pursuant
to Directive 2010/73/EU, the “Prospectus Directive”), a qualified
investor as defined in Article 2.1(e) of the Prospectus Directive (each,
an “Eligible Holder”).
The following table sets forth the Bank Notes that are subject to the
Exchange Offer:
CUSIP Number
|
|
Title of Security
|
|
Principal Amount Outstanding
|
|
Exchange Offer Cap
|
25466AAA9
|
|
8.70% Subordinated Notes Due 2019
|
|
$700,000,000
|
|
$500,000,000
|
|
|
|
|
|
|
|
Upon the terms and subject to the conditions of the Exchange Offer, the
Bank will make offers to Eligible Holders to exchange outstanding Bank
Notes for DFS Notes and cash, up to an aggregate principal amount of
Bank Notes not to exceed $500 million (the “Exchange Offer Cap”).
If an aggregate principal amount of the Bank Notes is validly tendered
and not validly withdrawn in excess of the Exchange Offer Cap, the Bank
will accept for exchange only an aggregate principal amount of the Bank
Notes not to exceed the Exchange Offer Cap on a pro rata basis, as
described in the confidential offering memorandum.
The Exchange Offer is subject to certain conditions, including the
requirement that a minimum of $250 million aggregate principal amount of
DFS Notes be issued in exchange for Bank Notes validly tendered and not
validly withdrawn.
Eligible Holders who validly tender and who do not validly withdraw
their Bank Notes prior to 5:00 p.m., New York City time, on November 1,
2012, subject to any extension by the Bank, will receive an early
exchange premium equal to $50.00 per $1,000 principal amount of Bank
Notes.
The Exchange Offer will expire at 11:59 p.m., New York City time,
on November 16, 2012, unless extended by the Bank. Tenders of Bank Notes
in the Exchange Offer may be validly withdrawn at any time prior to 5:00
p.m., New York City time, on November 1, 2012, subject to extension by
the Bank, but not thereafter, unless additional withdrawal rights are
required by law.
The DFS Notes will not be registered under the Securities Act or any
state securities laws. Therefore, the DFS Notes may not be offered or
sold in the United States absent registration or an applicable exemption
from the registration requirements of the Securities Act and any
applicable state securities laws. DFS will enter into a registration
rights agreement with respect to the DFS Notes.
Documents relating to the Exchange Offer will only be distributed to
holders of the Bank Notes that complete and return a letter of
eligibility confirming that they are Eligible Holders. Holders of the
Bank Notes that desire to review the eligibility letter may visit the
website for this purpose at http://www.dfking.com/discover
or contact D.F. King & Co., Inc., the information agent for the Exchange
Offer, by calling toll-free (800) 859-8509 or at (212) 269-5550 (banks
and brokerage firms).
This press release is not an offer to sell or a solicitation of an
offer to buy any security. The Exchange Offer is being made solely by
the confidential offering memorandum and related letter of transmittal
and only to such persons and in such jurisdictions as is permitted under
applicable law.
This press release contains certain statements that are forward-looking
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are difficult
to predict. Actual outcomes and results may differ materially from those
expressed in, or implied by, the Bank’s forward-looking statements.
Words such as “expects,” “anticipates,” believes,” “estimates” and other
similar expressions or future or conditional verbs such as “will,”
“should,” “would” and “could” are intended to identify such
forward-looking statements. Forward-looking statements speak only as of
the date of this press release, and the Bank undertakes no obligation to
update any forward-looking statement.
Source: Discover Financial Services
Discover Financial Services
Investors:
William
Franklin, 224-405-1902
williamfranklin@discover.com
or
Media:
Jon
Drummond, 224-405-1888
jondrummond@discover.com