Today Sotheby's announced the pricing of $300 million in unsecured notes due in 2022. The bond offer, for institutional investors should close around Sept 27th.
So what is Sotheby's going to do with $300 million, at first I was thinking they would be making investments in order to better compete with Christie's, but it is nothing exciting. The money will be used to payoff a previous bond which is due in 2015, and the benefit to Sotheby's is a lower interest rate.
Sotheby's press release states
Source: Sotheby's
Sotheby's (NYSE: BID) today announced the pricing of $300 million of its senior unsecured notes due 2022 through an offering to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and to non-U.S. persons under Regulation S under the Securities Act. The closing of the offering is expected to occur on or about September 27, 2012.
The notes will be sold to investors at a price of 100% of the principal amount thereof, plus accrued interest from September 27, 2012. The notes will pay interest semiannually at a rate of 5.25% per annum and will mature on October 1, 2022.
Sotheby's expects to use the net proceeds from this offering to redeem all of its outstanding 7.75% Senior Notes due 2015 at the make-whole premium specified in the indenture governing those notes and for general corporate purposes, including the potential repayment of other existing indebtedness.
The notes have not been registered under the Securities Act or any state securities laws. As a result, they may not be offered or sold in the United States or to any U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Under Rule 15c6-1 under the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes prior to the third business day before the delivery of the notes will be required, by virtue of the fact that the notes initially will settle on a delayed basis, to agree to a delayed settlement cycle at the time of any trade to prevent a failed settlement. Purchasers of the notes who wish to make such trades should consult their own advisors.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, nor shall there be any sale of the notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. This announcement does not constitute a notice of redemption of the 7.75% Senior Notes due 2015.
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