Eastman Chemical sets tender offer terms for $250M notes

KINGSPORT, Tenn. - Eastman Chemical Company (NYSE:EMN) today disclosed the payment details for its cash tender offer to purchase a portion of its 3.800% notes due in 2025. The company has set a cap of $250 million for the aggregate principal amount of the notes eligible for repurchase.

The total consideration for each $1,000 principal amount of the notes tendered and accepted for purchase is $993.26, which includes an early tender premium of $30. The purchase price was determined by a fixed spread over the yield of the U.S. Treasury Reference Security, with a reference yield of 4.751%.

Participants who tendered their notes by the early deadline of 5:00 p.m., New York City time, on August 9, 2024, are entitled to receive the total consideration. Payment for the notes accepted is expected to be made on August 14, 2024. The tender offer was fully subscribed by the early deadline, and as a result, no additional notes will be accepted.

Due to the oversubscription, the notes will be accepted on a prorated basis, with a proration factor of 90.28%. The tender offer was conducted according to the terms set forth in the Offer to Purchase, dated July 29, 2024.

Barclays Capital Inc., J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC acted as dealer managers for the tender offer, with D.F. King & Co., Inc. serving as the tender and information agent.

This press release serves as an informational notice and does not constitute an offer to purchase the notes. The completion of the tender offer is subject to the terms outlined in the Offer to Purchase.

Eastman Chemical Company is a global specialty materials company that was founded in 1920. With a workforce of approximately 14,000 employees, the company generated revenue of around $9.2 billion in 2023. The information provided here is based on a press release statement.

In other recent news, Eastman Chemical Company has announced a quarterly cash dividend of $0.81 per share, following a strong start to the year with Q1 earnings exceeding expectations by 7%. The company has also launched a tender offer to repurchase up to $250 million of its 3.800% notes due in 2025, demonstrating a proactive financial management strategy. Analyst firms including UBS and Piper Sandler have upgraded Eastman Chemical's shares, while Deutsche Bank, Citi, and Evercore ISI have increased their price targets following the company's positive Q1 earnings release. In other recent developments, Eastman Chemical has appointed Donald Slager to its Board of Directors, and continues to focus on its innovation-driven growth model, particularly its circular economy platform. These recent events reflect an active period for Eastman Chemical, with multiple analyst adjustments and strategic appointments shaping the company's trajectory.

InvestingPro Insights

Eastman Chemical Company's (NYSE:EMN) recent tender offer announcement comes amid a backdrop of strategic financial maneuvers. InvestingPro Tips suggest that the company's management has been focused on delivering value to shareholders, as evidenced by an aggressive share buyback strategy and a high shareholder yield. Notably, Eastman Chemical has a track record of raising its dividend for 14 consecutive years, underscoring its commitment to consistent shareholder returns. This is further supported by the company's impressive history of maintaining dividend payments for 31 consecutive years.

From a valuation standpoint, Eastman Chemical is trading at a price-to-earnings (P/E) ratio of 12.59, which appears modest when aligned with its near-term earnings growth, indicating potential for investment value. Additionally, the stock is known for its low price volatility, which might appeal to investors seeking stability in their portfolios. On the financial metrics front, the company's market capitalization stands at $11.02 billion, and it has a dividend yield of 3.41%, which is attractive to income-focused investors. Moreover, the company's revenue over the last twelve months as of Q2 2024 was $9.147 billion, reflecting the scale of its operations.

For investors seeking more in-depth analysis and additional InvestingPro Tips on Eastman Chemical Company, further insights are available at InvestingPro, which includes a number of tips beyond those mentioned here.

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