Li & Fung launched a tender offer to buy back up to $250mn of its $600m 4.5% 2025s in cash. It is offering $875 per $1,000 in principal for bondholders who tender before the early deadline date of December 6 and their notes will be accepted first. Holders tendering post the early deadline date will receive $845 per $1,000 in principal. The final deadline is on December 20. To finance the buyback offer Li & Fung plans to use its internal resources coupled with the proceeds from the sale of LF Logistics Holdings to Maersk Logistics & Services International. This transaction had an enterprise value of $3.6bn and was completed in August. The tender offer will help Li & Fung reduce its total debt.
Its 4.5% 2025s are trading at 84.275, yielding 11.35%. The company is thus offering a buyback premium of over 3.2 cents on the dollar.