Sears, Roebuck and Co. Announces Regulatory Approval of Credit Sale and Plans To Commence Tender Offers to Purchase for Cash Approximately $11.8 Billion Of Debt Securities
Sears, Roebuck and Co. (NYSE: S) ("Sears") announced today that it received notice that the Office of the Comptroller of the Currency has approved the previously announced acquisition by Citibank USA, N.A., an affiliate of Citigroup, Inc., of substantially all of the credit card accounts of Sears National Bank, an affiliate of Sears (the "Credit Sale"). Pursuant to the federal banking laws of the United States, Sears and Citicorp may only consummate the Credit Sale on or after the expiration of a 15-day waiting period following receipt of today's approval. The waiting period will expire on Friday, October 31, 2003 and the Credit Sale is currently expected to close promptly thereafter, subject to the satisfaction of the remaining conditions under the definitive purchase agreement relating to the Credit Sale.
Proceeds from the Credit Sale are intended to be used primarily to retire debt, return cash to shareholders and for general corporate purposes. Sears and its wholly owned subsidiaries, Sears Roebuck Acceptance Corp. ("SRAC") and Sears DC Corp., formerly known as Discover Credit Corp. ("SDC"), expect to commence promptly cash tender offers to purchase any and all of their respective unsecured public term debt securities maturing after 2003, which include 214 series of securities with an aggregate principal amount of approximately $11.8 billion. Delivery of offering materials to registered security holders will begin upon commencement of the offers.
The offers will relate to various series of debt securities, including approximately $9.7 billion in aggregate principal amount of term debt securities originally distributed primarily to institutional investors and issued by each of Sears, SRAC and SDC (collectively, the "Institutional Notes") and approximately $2.1 billion in aggregate principal amount of debt securities originally distributed primarily to individual investors and issued by SRAC (the "Retail Notes"). The offers for Institutional Notes and Retail Notes (together, the "Notes") are subject to the terms and conditions that will be included in the applicable offering materials. Each offer for each series of Notes will be independent and will not be conditioned upon any other offer, and each offer may be amended, extended or terminated individually. The offers will not be conditioned on any minimum amount of Notes being tendered. Noteholder consent is not required to consummate the Credit Sale and will not be sought as part of the offers.
The offers will be based on either a fixed price or a price that relates to a fixed spread over the yield to maturity of certain US Treasury securities, plus, in both cases, accrued and unpaid interest. Consideration offered on the fixed price securities, primarily redeemable in 2004, generally will be par plus Sears' estimated cost of carry through redemption, net of acquisition costs. Additional information will be available upon commencement of the offers. Tender spreads for other securities are shown in Schedules 1 and 2 for the Institutional Notes and Schedule 3 for the Retail Notes, each of which is attached hereto. The terms of the offers will be specific to each series of Notes and, in the case of the Institutional Notes, will include an early tender premium that will be offered to holders that validly tender and do not withdraw their notes prior to an early tender date, which is anticipated to be on or after Wednesday, October 29, 2003. In each case, the consideration to be paid for Notes properly tendered and accepted for payment will be determined in accordance with the procedures described in the applicable offering materials.
Each tender offer for each series of Notes will be made pursuant to the terms and conditions contained in two separate Offers to Purchase and related Letters of Transmittal. The offers are expected to expire 20 business days following commencement of the offers, unless earlier extended or terminated. Withdrawal rights for each offer may differ and security holders are urged to read the Offers to Purchase and related Letters of Transmittal for more details. The offers are conditioned on, among other things, consummation of the Credit Sale.
This announcement is not an offer to purchase or a solicitation of an offer to purchase with respect to any securities. The tender offers will be made solely pursuant to the Offers to Purchase and related Letters of Transmittal and are not being made in any jurisdiction in which such an offer would be unlawful.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Sears, SRAC and SDC expect to commence the tender offers and begin distribution of offering materials to debt holders promptly. These materials will contain important information. Security holders are advised to carefully review these documents and related materials when they become available. Copies of any offering materials may be obtained on the Internet at or through D.F. King & Co., Inc., the Information Agent for the offers, by telephone at (800) 431-9642 (toll free) or in writing at 48 Wall Street, 22nd Floor, New York, NY 10005.
About Sears
Sears, Roebuck and Co. is a broadline retailer with significant service and credit businesses. In 2002, Sears' revenue was $41.4 billion. Sears offers its wide range of apparel, home and automotive products and services to families in the U.S. through Sears stores nationwide, including approximately 870 full-line stores. Sears also offers a variety of merchandise and services over the Internet via its sears.com and landsend.com websites and through a variety of specialty catalogues.
About Sears Roebuck Acceptance Corp.
SRAC is a wholly owned finance subsidiary of Sears. SRAC raises funds primarily by issuing commercial paper, medium-term notes and discrete underwritten debt. SRAC uses the proceeds from its borrowings to acquire short-term notes of Sears.
About Sears DC Corp.
SDC is a wholly owned subsidiary of Sears and was formed to borrow in domestic and foreign debt markets and lend the proceeds of such borrowings to Sears and certain direct and indirect subsidiaries of Sears in exchange for their unsecured notes. SDC raised funds through the sale of its medium-term notes and direct placement of commercial paper with corporate and institutional investors.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" about Sears' expectations regarding the sale of its Credit and Financial Products business and the timing of the proposed tender offers. These statements are forward- looking statements based on assumptions about the future that are subject to risks and uncertainties, and actual results may differ materially from the results projected in the forward-looking statements. Risks and uncertainties include the possibility that the sale of the Credit and Financial Products business, which is subject to conditions of closing, does not close, and other factors outside the control of the Sears. While Sears believes that its forecasts and assumptions are reasonable, it cautions that actual results may differ materially. Sears intends the forward-looking statements to speak only as of the time first made and does not undertake to update or revise them as more information becomes available. Additional discussion of these and other risks and uncertainties is contained in Sears' filings with the Securities and Exchange Commission, including Sears' Annual Report on Form 10-K for the year ended December 28, 2002, its Quarterly Reports on Form 10-Q for the quarters ended March 29, 2003 and June 28, 2003 and any Current Report on Form 8-K currently on file with the Securities and Exchange Commission during the current fiscal year.
Schedule 1
Institutional Notes Issued by Sears DC Corp.
CUSIP Security Description Principal Fixed
Outstanding Spread
($mm) (bp)
DC2MTFX84 SDC 9.20% Series II MTN due 2/27/2012 10.000 60
DC2MTFX80 SDC 9.15% Series II MTN due 3/1/2012 1.000 60
DC2MTFX81 SDC 9.15% Series II MTN due 3/1/2012 2.000 60
DC2MTFX87 SDC 9.15% Series II MTN due 3/10/2012 0.500 60
DC2MTFX93 SDC 9.14% Series II MTN due 3/13/2012 10.000 60
DC2MTFX94 SDC 9.07% Series II MTN due 3/16/2012 7.000 60
25466PAC2 SDC 9.14% Series III MTN due 3/19/2012 4.300 60
25466PAG3 SDC 9.26% Series III MTN due 3/20/2012 3.000 60
25466PBV9 SDC 9.10% Series III MTN due 4/13/2012 6.000 60
Schedule 2
Institutional Notes Issued by Sears Roebuck Acceptance Corp.
CUSIP Security Description Principal Fixed
Outstanding Spread
($mm) (bp)
81240QKM3 SRAC 6.00% Series IV MTN due 01/18/2005 5.000 44
81240QKP6 SRAC 6.00% Series IV MTN due 02/07/2005 5.000 48
81240QKQ4 SRAC 6.10% Series IV MTN due 02/25/2005 5.000 44
812404AF8 SRAC 6.75% Notes due 09/15/2005 250.000 44
81240QBZ4 SRAC 6.11% Series I MTN due 11/15/2005 0.100 52
81240QBW1 SRAC 6.13% Series I MTN due 11/15/2005 0.575 52
81240QBX9 SRAC 6.15% Series I MTN due 11/15/2005 4.402 52
81240QCL4 SRAC 6.33% Series I MTN due 12/12/2005 1.250 56
81240QCM2 SRAC 6.38% Series I MTN due 12/13/2005 5.000 56
81240QLX8 SRAC 5.66% Series V MTN due 12/14/2005 10.000 56
81240QCU4 SRAC 6.36% Series I MTN due 01/03/2006 4.000 48
81240QCY6 SRAC 6.30% Series I MTN due 01/09/2006 5.000 48
81240QCZ3 SRAC 6.31% Series I MTN due 01/09/2006 1.000 48
812404AG6 SRAC 6.125% Notes due 01/15/2006 250.000 44
81240QGC0 SRAC 7.06% Series III MTN due 10/10/2006 5.000 60
812404AT8 SRAC 6.70% Notes due 11/15/2006 300.000 56
81240QHD7 SRAC 7.20% Series III MTN due 05/09/2007 5.000 56
81240QHE5 SRAC 7.15% Series III MTN due 05/21/2007 5.000 60
812404AV3 SRAC 7.00% Notes due 06/15/2007 500.000 56
81240QHT2 SRAC 7.04% Series III MTN due 06/19/2007 10.000 64
81240QJD5 SRAC 6.47% Series IV MTN due 08/13/2007 5.000 60
812404AW1 SRAC 6.70% Notes due 09/18/2007 150.000 60
81240QJN3 SRAC 6.60% Series IV MTN due 11/05/2007 5.000 56
81240QKJ0 SRAC 6.56% Series IV MTN due 12/05/2007 11.000 60
81240QKK7 SRAC 6.34% Series IV MTN due 12/18/2007 5.000 60
81240QLB6 SRAC 6.30% Series IV MTN due 03/18/2008 5.000 60
81240QLD2 SRAC 6.28% Series IV MTN due 04/08/2008 5.000 52
81240QLF7 SRAC 6.24% Series IV MTN due 05/01/2008 5.000 56
81240QLH3 SRAC 6.30% Series IV MTN due 05/29/2008 5.000 56
81240QLK6 SRAC 6.25% Series IV MTN due 06/02/2008 5.000 56
81240QLL4 SRAC 6.19% Series IV MTN due 06/19/2008 5.000 48
81240QLM2 SRAC 6.17% Series IV MTN due 07/14/2008 5.000 52
81240QLN0 SRAC 6.20% Series IV MTN due 07/15/2008 5.000 52
81240QLP5 SRAC 6.10% Series IV MTN due 07/21/2008 5.000 52
81240QLS9 SRAC 6.125% Series IV MTN due 08/15/2008 5.000 56
81240QLT7 SRAC 6.10% Series IV MTN due 09/10/2008 5.000 52
81240QLU4 SRAC 6.00% Series V MTN due 11/20/2008 5.000 60
81240QLV2 SRAC 6.00% Series V MTN due 11/24/2008 5.000 60
81240QLY6 SRAC 5.75% Series V MTN due 01/20/2009 5.000 60
81240QLZ3 SRAC 5.70% Series V MTN due 02/12/2009 5.000 60
81240QMA7 SRAC 5.875% Series V MTN due 03/05/2009 5.000 64
81240QMB5 SRAC 6.125% Series V MTN due 03/16/2009 5.000 64
81240QMC3 SRAC 6.05% Series V MTN due 03/30/2009 5.000 64
81240QMD1 SRAC 6.00% Series V MTN due 04/15/2009 5.000 68
81240QLE0 SRAC 6.49% Series IV MTN due 04/17/2009 15.000 68
812404BF7 SRAC 6.25% Notes due 05/01/2009 750.000 64
81240QLQ3 SRAC 6.20% Series IV MTN due 08/09/2010 5.000 80
812404BG5 SRAC 7.00% Notes due 02/01/2011 1,000.000 44
812404BH3 SRAC 6.75% Notes due 08/15/2011 750.000 48
812404BJ9 SRAC 6.70% Notes due 04/15/2012 600.000 56
81240QLJ9 SRAC 6.635% Series IV MTN due 05/18/2012 10.000 64
81240QLR1 SRAC 6.51% Series IV MTN due 08/15/2013 15.000 72
812404AY7 SRAC 6.875% Notes due 10/15/2017 300.000 96
812404AX9 SRAC 7.50% Notes due 10/15/2027 250.000 140
812404AZ4 SRAC 6.75% Notes due 01/15/2028 200.000 115
812404BE0 SRAC 6.50% Notes due 12/01/2028 300.000 115
812404BK6 SRAC 7.00% Notes due 06/01/2032 1,000.000 115
Schedule 3
Sears Roebuck Acceptance Corp. InterNotes
CUSIP Coupon Stated Maturity Earliest Principal Fixed
Date Redemption Date Outstanding Spread
($mm) (bp)
8124JFAD8 7.250% 12/15/2009 12/15/2004 34.326 40
8124JFAH9 7.300% 12/15/2009 12/15/2004 27.994 40
8124JFAM8 7.400% 1/15/2010 1/15/2005 10.459 45
8124JFAR7 7.400% 1/15/2010 1/15/2005 19.068 45
8124JFAV8 7.450% 1/15/2010 1/15/2005 40.699 45
8124JFAY2 4.950% 2/15/2005 * 89.413 45
8124JFBK1 7.000% 3/15/2010 3/15/2005 20.171 45
8124JFBP0 6.800% 3/15/2010 3/15/2005 6.002 45
8124JFAA4 5.650% 12/15/2005 * 35.384 50
8124JFAE6 5.750% 12/15/2005 * 42.917 50
8124JFAJ5 6.000% 1/15/2006 * 16.419 50
8124JFAN6 5.900% 1/15/2006 * 23.187 50
8124JFAS5 5.900% 1/15/2006 * 50.190 50
8124JFAW6 5.400% 1/15/2006 * 59.717 50
8124JFBA3 5.400% 2/15/2006 * 50.182 50
8124JFBC9 5.500% 2/15/2006 * 40.414 50
8124JFBE5 5.800% 2/15/2006 * 58.535 50
8124JFBG0 5.400% 3/15/2006 * 40.439 50
8124JFBL9 5.200% 3/15/2006 * 26.670 50
8124JFAB2 6.600% 12/15/2007 * 32.125 60
8124JFAF3 6.700% 12/15/2007 * 25.351 60
8124JFAK2 7.000% 1/15/2008 * 17.834 65
8124JFAP1 6.900% 1/15/2008 * 19.777 65
8124JFAT3 6.750% 1/15/2008 * 56.371 65
8124JFAX4 6.150% 1/15/2008 * 43.647 65
8124JFAZ9 6.200% 2/15/2008 * 39.998 65
8124JFBB1 6.100% 2/15/2008 * 27.315 65
8124JFBD7 6.250% 2/15/2008 * 24.063 65
8124JFBF2 6.650% 2/15/2008 * 46.362 65
8124JFBH8 6.200% 3/15/2008 * 24.349 65
8124JFBM7 6.000% 3/15/2008 * 15.595 65
8124JFAC0 7.400% 12/15/2012 * 45.163 65
8124JFAG1 7.500% 12/15/2012 * 54.895 65
8124JFAL0 7.500% 1/15/2013 * 14.229 65
8124JFAQ9 7.500% 1/15/2013 * 21.498 65
8124JFAU0 7.500% 1/15/2013 * 36.380 65
8124JFBJ4 7.150% 3/15/2013 * 13.819 65
8124JFBN5 7.050% 3/15/2013 * 8.358 65
SOURCE: Sears, Roebuck and Co.
CONTACT: Edgar P. McDougal, +1-847-286-9669, or Investors, Pam White,
+1-847-286-1468, both of Sears, Roebuck and Co.
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