BAT’s Cash Capped Debt Tender Offers Garner Strong Investor Interest and Increase Maximum Tender Amount

British American Tobacco (BAT) recently announced significant developments in its debt management strategy through cash capped debt tender offers. This move reflects the company’s proactive approach to optimizing its capital structure and managing debt efficiently.

Early Results of the Tender Offers

The early results of BAT’s cash capped debt tender offers indicate a substantial response from investors. As of the Early Tender Deadline, several series of Securities had been validly tendered, showcasing investor interest in the offer.

Here’s a snapshot of the principal amounts outstanding and tendered for each series of Securities:

Issuer / OfferorTitle of SecurityPrincipal Amount OutstandingPrincipal Amount TenderedAcceptance Priority Level
BATIF2.250% Guaranteed Notes due 2052£650,000,000£385,519,0001
BATIF4.000% Guaranteed Notes due 2055£350,000,000£169,682,0002
BATIF2.000% Guaranteed Notes due 2045€600,000,000€160,078,0003
BATCAP3.984% Notes due 2050$1,000,000,000$687,038,0004
BATCAP3.734% Notes due 2040$750,000,000$344,435,0005
BATCAP4.540% Notes due 2047$2,500,000,000$1,157,676,0006
BATCAP4.758% Notes due 2049$1,000,000,000$388,247,0007

Increased Maximum Tender Amount

BAT has decided to increase the maximum aggregate purchase price in the Tender Offers to £1.2 billion. This adjustment demonstrates the company’s flexibility in responding to market conditions and investor demand.

Acceptance Priority Levels and Purchase Strategy

The Acceptance Priority Levels determine the purchase priority for each series of Securities. Higher priority levels are accepted first, subject to the Maximum Tender Amount. This strategy ensures a structured and efficient debt purchase process.

  • Acceptance Priority Levels 1-5: Securities in these levels are expected to be accepted in full.
  • Acceptance Priority Level 6: Securities in this level will be accepted on a pro-rata basis.
  • Acceptance Priority Level 7: Securities in this level will not be accepted.

Currency Considerations

The purchase price for Dollar Securities, Sterling Securities, and Euro Securities will be paid in the respective currencies. Conversion to Sterling will be based on specified exchange rates to determine the Maximum Tender Amount.

Implications for Investors

Investors participating in BAT’s Tender Offers have the opportunity to optimize their portfolio by tendering their Securities. The early results suggest a favorable response, indicating investor confidence in BAT’s debt management strategies.


British American Tobacco’s cash capped debt tender offers and increased Maximum Tender Amount signify a strategic approach to debt management. By proactively engaging with investors and optimizing its capital structure, BAT aims to enhance shareholder value and financial flexibility.