Alexander & Baldwin Finalizes Post-Separation Financing Arrangements.
New A&B Will Have a Well-Capitalized Balance Sheet Providing
Strong Liquidity and Financial Flexibility
Ruling on Tax-Free Nature of Planned
HONOLULU, June 7, 2012 /PRNewswire/ — Alexander & Baldwin
Holdings, Inc. (
: ALEX)(“Company”), successor by merger to
Alexander & Baldwin, Inc., today announced that, in connection with
previously announced plans to separate its transportation and land
businesses into two publicly traded companies, it has entered into new
financing arrangements for the land business (“New A&B”).
The new financing arrangements will provide significant liquidity and
support New A&B in the execution of its growth strategies as a
An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent.
and complement separately announced financing
arrangements that have been made for
Matson Navigation Company
, Inc. The
New A&B financing arrangements consist of: (1) a new $260 million
unsecured revolving senior credit facility with a syndicate of banks,
including an option to increase available capacity up to an additional
$90 million; and (2) a replenishing $300 million, three-year unsecured
note purchase and private shelf agreement, including a renewal or
replacement of $207 million of existing unsecured notes with Prudential
Investment Management, Inc. and its affiliates (collectively,
“Establishment of these financing arrangements marks another
critical milestone as we move toward the separation of our
transportation and land businesses into two stand-alone, publicly traded
companies. Along with the receipt of a favorable IRS ruling on the
separation, we have successfully satisfied key prerequisites to the
planned separation. Subject to final board approval and the completion
of various administrative and regulatory matters, we remain on track for
completion of the separation early in the third quarter of this year or
as early as the end of the second quarter,” said Stanley M.
Kuriyama, president and chief executive officer of Alexander &
Baldwin Holdings, Inc.
“As a stand-alone company, New A&B will have a strong,
well-capitalized balance sheet and the new financing arrangements will
further enhance New A&B’s liquidity and financial
flexibility,” said Kuriyama. “In addition to securing
significant borrowing capacity under our financing arrangements,
we’ve also extended the maturities of New A&B’s unsecured
term debt by several years, resulting in no large principal payment
required in any year through 2026. The average required annual principal
payment through 2026 will be $14 million. The interest rates on the
notes comprising the $211 million aggregate amount of New A&B term
debt remain unchanged.”
facility has an initial five-year
term maturing in June 2017, and will be used for New A&B’s
development projects, real estate investments and general corporate
Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world.
, N.A. served as administrative agent, and
Merrill Lynch, Pierce, Fenner & Smith Incorporated and First
Hawaiian Bank served as joint lead arrangers of the new unsecured senior
credit facility, whose lending group also includes Wells Fargo Bank,
American AgCredit PCA,
Bank of Hawaii
financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest.
Pacific Bank. Both the revolving credit facility and Prudential shelf
agreement contain customary representations, financial and other
affirmative and negative covenants, events of defaults and remedies, and
are subject to completion of the separation transaction.
In addition to the completion of post-separation financing
arrangements, the Company has received a favorable private letter ruling
from the U.S. Internal Revenue Service confirming the tax-free nature of
the planned separation. Furthermore, Alexander & Baldwin, Inc.
completed its shareholder-approved holding company merger which was
intended to facilitate the separation. As a result of the merger,
Alexander & Baldwin Holdings, Inc. replaced Alexander & Baldwin,
Inc. as the publicly held corporation through which the Company’s
operations are conducted and the previously-disclosed “Maritime
Restrictions” became effective for Company shareholders.
Additional information about the financing arrangements and other
matters covered in this release can be found in the Company’s
, which will be filed with the Securities and Exchange Commission
About Alexander & Baldwin Holdings, Inc. Alexander & Baldwin
Holdings, Inc., successor by merger to Alexander & Baldwin, Inc., is
headquartered in Honolulu, Hawaii. A&B is engaged in ocean
transportation and logistics services through its subsidiaries, Matson
Navigation Company, Inc. and Matson Logistics, Inc.; in real estate
through A&B Properties, Inc.; and in agribusiness through Hawaiian
Commercial & Sugar Company. Additional information about A&B may
be found at its web site: www.alexanderbaldwin.com.
Forward-Looking Statements Statements in this press release that are
not historical facts are “forward-looking statements,” within
the meaning of the
Private Securities Litigation Reform Act
that involve a number of risks and uncertainties that could cause actual
results to differ materially from those contemplated by the relevant
forward-looking statement. These forward-looking statements are not
guarantees of future performance. This release should be read in
conjunction with our Annual Report on Form 10-K and our other filings
with the SEC through the date of this release, which identify important
factors that could affect the forward-looking statements in this
release. We do not undertake any obligation to update our
SOURCE Alexander & Baldwin Holdings, Inc.