Dow $6B Offering Oversubscribed

Dow Chemical

Let's do the math, $8.25 billion raised in a week (through debt and equity offerings). No Dow Ag sale and the stock is up 16% from this week's lows. Can we put the talk of selling it to bed forever now?

The release:


"The Dow Chemical Company (NYSE: DOW - News) today announced that on May 7, it priced a $6 billion underwritten public offering of debt securities, including $1.75 billion aggregate principal amount of 7.6% notes due 2014; $3.25 billion aggregate principal amount of 8.55% notes due 2019; and $1 billion aggregate principal amount of 9.4% notes due 2039.

Of the $6 billion in notes to be offered, $1.35 billion aggregate principal amount of the 8.55% notes due 2019 will be offered by accounts and funds managed by Paulson & Co. and trusts created by members of the Haas Family. These investors received notes from Dow in payment for 1.31 million shares of Dow's Perpetual Preferred Stock, Series B, at par plus accrued dividends. Dow will not receive any of the proceeds from the sale of notes by the selling noteholders.

Dow intends to use the net proceeds received from the offering for refinancings, renewals, replacements and refunding of outstanding indebtedness, including repayment of a portion of the Company's term loan borrowings.

Together with the common stock offering which priced on May 6, the over-allotment option which was exercised on May 7, and upon consummation of this debt offering, Dow will retire all remaining Perpetual Preferred Stock, Series B from the Company's capital structure. Eliminating these shares is immediately and significantly accretive to net income available for common shareholders. Dow will not receive any of the proceeds from the exercise of the over-allotment option.

"Today, we announced yet another oversubscribed offering - the second one this week," said Andrew N. Liveris, Chairman and Chief Executive Officer. "Coming on the heels of a very successful equity issuance, this bond offering clearly shows investor confidence in the Company's strategic direction and our ability to generate significant value over the long-run. And with a substantial amount of proceeds going to pay down our term bridge loan well ahead of our plan, this is further evidence of the Company's commitment to financial flexibility and maintaining an investment grade rating. The success of our equity and debt issuances this week also allows us to make the right decisions for our shareholders on the assets we will dispose of, the timing of these dispositions, and their valuations."


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