Vector Group Ltd. Completes the Sale of $850.0 Million of its 6.125% Senior Secured Notes Due 2025
January 28, 2017 at 03:32 am IST
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Vector Group Ltd. completed the sale of $850.0 million of its 6.125% senior secured notes due 2025 to qualified institutional buyers pursuant to Rule 144A and pursuant to Regulation S in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes were issued under an indenture, dated as of January 27, 2017, among the Company, the subsidiaries of the Company party thereto as note guarantors and U.S. Bank National Association, as trustee and as collateral agent. The aggregate net cash proceeds from the sale of the Notes were approximately $831.1 million after deducting the Initial Purchaser’s discount and estimated expenses and fees payable by the Company in connection with the Notes offering. The Company is using the net cash proceeds from the Notes offering, together with the proceeds of the Equity Sale and cash on hand, to redeem all of the Company’s outstanding 7.750% Senior Secured notes due 2021 and to satisfy and discharge the indenture governing the Existing Notes. The Company will pay cash interest at a rate of 6.125% per year, payable semi-annually on February 1 and August 1 of each year, beginning on August 1, 2017. Interest will accrue from January 27, 2017. Interest on overdue principal and interest, if any, will accrue at a rate that is 1% higher than the then applicable interest rate on the Notes. The Company will make each interest payment to the holders of record on the immediately preceding January 15 and July 15.
Vector Group Ltd. is a holding company for Liggett Group LLC, Vector Tobacco LLC, and New Valley LLC. The Company operates through two segments: Tobacco and Real Estate. Tobacco segment is engaged in the manufacture and sale of discount cigarettes in the United States through its Liggett Group LLC and Vector Tobacco LLC subsidiaries. Liggett Group LLC manufactures and markets approximately 100 different cigarette brand styles. Liggetts Group LLCâs brand portfolio includes Montego, Eagle 20âs, Pyramid and Grand Prix, Liggett Select, Eve, USA and various partner brands and private label brands. Real Estate segment is engaged in the real estate investment business through its subsidiary, New Valley LLC, which acquires and invests in real estate properties or projects. It invests in numerous real estate projects in different asset classes, including planned communities, condominium and mixed-use developments, apartment buildings, hotels and commercial properties.