Dow Announces the Pricing of its Cash Tender Offer

Rhea-AI Summary

Dow Chemical Company (NYSE: DOW) has announced the pricing terms for its previously announced tender offer to purchase certain debt securities from Dow Chemical, Rohm and Haas, and Union Carbide , with an aggregate purchase consideration of up to $1.0 billion.

The early participation date was March 10, 2025, with expected payment on March 13, 2025. Dow will accept all validly tendered 0.500% Notes Due 2027 and 7.850% Debentures Due 2029, plus $134,209,000 of the 7.375% Debentures Due 2029 using a proration factor of approximately 57.1%. Holders will receive the total consideration plus accrued interest for accepted securities.

Citigroup Global Markets Inc. and HSBC Securities (USA) Inc. are acting as joint lead dealer managers, with RBC Capital Markets, and TD Securities (USA) as co-dealer managers for the tender offer.

Positive

• Proactive debt management through $1.0 billion tender offer
• Full acceptance of two debt security series indicates strong financial position

Negative

• Unable to accept all tendered securities due to reaching tender cap
• 57.1% proration factor for 7.375% Debentures indicates oversubscription

Insights

Financial Analyst

Dow's $1.0 billion tender offer represents a strategic debt management initiative that will meaningfully reshape its liability profile. The company has elected to repurchase all validly tendered 0.500% Notes Due 2027 and 7.850% Debentures Due 2029, along with a prorated portion (57.1%) of the 7.375% Debentures Due 2029, with settlement expected on March 13.

This transaction delivers several immediate financial benefits to Dow. First, it enables the company to retire what appears to be a mix of debt maturities, with particular focus on obligations maturing in 2027 and 2029. By proactively addressing these future payment obligations, management gains enhanced flexibility in its capital allocation strategy.

The tender offer was substantially oversubscribed, as evidenced by the need for proration, indicating strong bondholder interest in tendering their securities. This likely reflects both the attractive pricing terms offered by Dow and possibly bondholders' desire for liquidity given current market conditions.

Most significantly, this liability management exercise aligns with prudent financial stewardship, as Dow is utilizing its balance sheet capacity to potentially reduce its overall interest expense burden. By addressing debts that include higher-coupon securities (the 7.375% and 7.850% debentures), Dow is positioning itself to benefit from interest expense savings going forward.

The reference to a "Financing Condition" suggests this tender offer may be part of a broader refinancing strategy, potentially allowing Dow to replace these obligations with more advantageous funding terms given the current interest rate environment.

Debt Markets Expert

Dow's $1 billion tender offer execution demonstrates sophisticated liability management that warrants investor attention. The company's selective approach to debt repurchases reveals a targeted strategy to optimize its debt structure rather than simply reducing gross debt levels.

The acceptance pattern is particularly telling - fully accepting the 0.500% 2027 notes and two separate 2029 debenture series (7.850% and 7.375% partially) while declining other tendered securities. This suggests management is strategically addressing specific debt tranches that presented the most advantageous economic opportunity.

The significant oversubscription requiring 57.1% proration for one series indicates bondholders found Dow's repurchase terms highly attractive. This successful tender execution demonstrates Dow's continued strong access to capital markets and ability to effectively manage its liability profile.

From a technical perspective, removing these specific debt securities from the market improves Dow's maturity ladder by reducing 2027 and 2029 obligations, potentially creating more balanced debt expiration timelines. The inclusion of euro-denominated securities (€1,000 denomination mentioned) shows Dow's comprehensive approach to liability management across currency exposures.

The timing of this tender likely takes advantage of recent market conditions to optimize borrowing costs. The mechanics of the offer, involving reference yields and total consideration calculations, indicates Dow has executed this transaction at financially advantageous terms that should benefit the company's interest expense profile while maintaining appropriate leverage ratios.

MIDLAND, Mich., March 11, 2025 /PRNewswire/ -- The Dow Chemical Company ("TDCC"), a wholly owned subsidiary of Dow Inc. (NYSE: DOW), announced today, in connection with its previously announced tender offer (the "Tender Offer") to purchase certain of its debt securities and certain debt securities of Rohm and Haas Company ("Rohm and Haas") and Union Carbide Corporation ("UCC"), each a wholly owned subsidiary of TDCC, the pricing terms for the series of notes and debentures listed in the table below (collectively, the "Securities") that have been validly tendered (and not subsequently validly withdrawn) on or prior to the Early Participation Date (as defined below) and accepted for purchase by TDCC, for an aggregate purchase consideration of up to $1.0 billion (excluding Accrued Interest (as defined below)). The Tender Offer is being made pursuant to TDCC's Offer to Purchase, dated February 25, 2025 (the "Offer to Purchase"), which sets forth a more comprehensive description of the terms and conditions of the Tender Offer. Capitalized terms used but not defined in this announcement have the meanings given to them in the Offer to Purchase.

Set forth below are the applicable Reference Yields and Total Consideration for each series of Securities, as calculated at 10:00 a.m., New York City time (3:00 p.m., London time) today, March 11, 2025, in accordance with the terms set out in the Offer to Purchase.

Title of Securities	Security Identifier(s)	Original Issuer	Principal Amount Outstanding	Acceptance Priority Level	Purchase Consideration Acceptance Sublimit	Aggregate Principal Amount Tendered as of the Early Participation Date(1)	Aggregate Principal Amount Accepted for Purchase	Reference Security / Interpolated Rate	Reference Yield	Fixed Spread	Total Consideration(2)
0.500% Notes Due 2027	ISIN: XS2122485 845	TDCC	€1,000,000,000	1	€500,000,000	€504,493,000	€504,493,000	Interpolated Rate	2.320 %	25 bps	€960.04
7.850% Debentures Due 2029	CUSIP: 775371AU1   ISIN: US775371A U10	Rohm and Haas	$595,078,000	2	None	$284,030,000	$284,030,000	4.250% UST due January 31, 2030	4.011 %	55 bps	$1,128.06
7.375% Debentures Due 2029	CUSIP: 260543BJ1   ISIN: US260543B J10	TDCC	$778,773,000	3	None	$235,733,000	$134,209,000	4.250% UST due January 31, 2030	4.011 %	40 bps	$1,122.91
6.300% Notes Due 2033	CUSIP: 260543DG5   ISIN: US260543DG52	TDCC	$600,000,000	4	None	$241,704,000	$0	4.625% UST due February 15, 2035	N/A	65 bps	N/A
9.400% Notes Due 2039	CUSIP: 260543BY8   ISIN: US260543BY86	TDCC	$557,943,000	5	$100,000,000	$291,179,000	$0	4.625% UST due February 15, 2035	N/A	130 bps	N/A
7.750% Debentures Due 2096	CUSIP: 905581AS3   ISIN: US905581AS39	UCC	$135,172,000	6	None	$48,529,000	$0	4.500% UST due November 15, 2054	N/A	155 bps	N/A

(1)	As reported by Global Bondholder Services Corporation, the depositary and information agent (the "Depositary and Information Agent") in connection with the Tender Offer.
(2)	The Total Consideration payable for each $1,000 or €1,000 principal amount of Securities validly tendered (and not subsequently validly withdrawn) on or prior to the Early Participation Date and accepted for purchase by TDCC, when calculated as set out herein with reference to the applicable Fixed Spread, already includes the Early Participation Amount of $30 or €30 (as applicable) per series of Securities as set out in the Offer to Purchase. In addition, holders whose Securities are accepted will also receive Accrued Interest (as defined below) on such Securities.

The early participation date for the Tender Offer was 5:00 p.m. (New York City time) on March 10, 2025 (the "Early Participation Date"). Subject to the terms and conditions set forth in the Offer to Purchase, TDCC will accept for payment, up to the Tender Cap, Securities validly tendered and not validly withdrawn at or prior to the Early Participation Date as shown in the table above. TDCC has elected to exercise its right to have an early settlement. The date for payment in respect of such Securities is expected to be March 13, 2025 (the "Early Settlement Date").

Upon the terms and subject to the conditions set forth in the Offer to Purchase, holders whose Securities were validly tendered and not validly withdrawn at or prior to the Early Participation Date, and are accepted for purchase in the Tender Offer, will receive the applicable Total Consideration, as set out above, for each $1,000 or €1,000 principal amount of such Securities in cash on the Early Settlement Date.

In addition to the applicable Total Consideration, such holders whose Securities are accepted for purchase will receive a cash payment equal to the accrued and unpaid interest on such Securities from and including the immediately preceding interest payment date for such Securities to, but excluding, the Early Settlement Date (the "Accrued Interest"). Interest will cease to accrue on the Early Settlement Date for all Securities that were validly tendered and not validly withdrawn at or prior to the Early Participation Date, and that are accepted for purchase in the Tender Offer.

Because the aggregate purchase price (excluding Accrued Interest) payable for the aggregate principal amount of Securities validly tendered prior to or at the Early Participation Date and not validly withdrawn would exceed the Tender Cap or the applicable Acceptance Sublimit set forth in the table above, TDCC will not accept for purchase all Securities that have been tendered by the Early Participation Date. TDCC will accept for purchase all of the 0.500% Notes Due 2027 and the 7.850% Debentures Due 2029 validly tendered and not validly withdrawn as of the Early Participation Date. Additionally, TDCC will accept for purchase $134,209,000 in aggregate principal amount of the 7.375% Debentures Due 2029, validly tendered and not validly withdrawn as of the Early Participation Date on a prorated basis as described in the Offer to Purchase, using a proration factor of approximately 57.1%. TDCC will not accept for purchase any other Securities tendered in the Tender Offer. Any Securities tendered and not accepted for purchase will be returned promptly to holders following the Early Settlement Date.

Our obligation to accept for payment and to pay for any of the Securities validly tendered in the Tender Offer is not subject to any minimum amount of Securities being tendered, but is subject to the satisfaction or waiver of a number of conditions, described in the Offer to Purchase, including the Financing Condition. All such conditions to the Tender Offer have been satisfied or waived. TDCC reserves the right, subject to applicable law, to amend, extend or terminate any of the Tender Offer at any time in its sole discretion.

In connection with the Tender Offer, TDCC has retained Citigroup Global Markets Inc. and HSBC Securities (USA) Inc. to act as joint lead dealer managers (together, the "Joint Lead Dealer Managers"), and  RBC Capital Markets, LLC and TD Securities (USA) LLC to act as co-dealer managers (together, the "Co-Dealer Managers" and together with the Joint Lead Dealer Managers, the "Dealer Managers") in connection with the Tender Offer. Questions and requests for assistance regarding the terms of the Tender Offer should be directed to Citigroup Global Markets Inc. at +1 (800) 558-3745 (toll-free) and HSBC Securities (USA) Inc. at +1 (888) HSBC-4LM (toll-free). Copies of the Offer to Purchase and any amendments or supplements to the foregoing may be obtained from the Depositary and Information Agent, by calling (212) 430-3774 (for banks and brokers only) or (855) 654-2014 (toll-free) (for all others) or via contact@gbsc-usa.com.

None of Dow Inc., TDCC, Rohm and Haas, UCC, the Depositary and Information Agent, the Dealer Managers or the trustee under the indentures governing the Securities, or any of their respective affiliates, is making any recommendation as to whether holders should tender or refrain from tendering all or any portion of their Securities in response to the Tender Offer, and no one has been authorized by any of them to make such a recommendation. Holders must make their own decision as to whether to tender their Securities and, if so, the principal amount of Securities as to which action is to be taken. Holders should consult their tax, accounting, financial and legal advisers regarding the tax, accounting, financial and legal consequences of participating or declining to participate in the Tender Offer.

The Tender Offer is only being made pursuant to the Offer to Purchase. This press release is qualified in its entirety by the Offer to Purchase. This press release is neither an offer to purchase or sell nor a solicitation of an offer to purchase or sell any Securities in the Tender Offer or any other securities of TDCC, Rohm and Haas or UCC. The Tender Offer is not being made to holders of Securities in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the Tender Offer is required to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on behalf of TDCC, Rohm and Haas or UCC by the Dealer Managers, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About Dow
Dow (NYSE: DOW) is one of the world's leading materials science companies, serving customers in high-growth markets such as packaging, infrastructure, mobility and consumer applications. Our global breadth, asset integration and scale, focused innovation, leading business positions and commitment to sustainability enable us to achieve profitable growth and help deliver a sustainable future. We operate manufacturing sites in 30 countries and employ approximately 36,000 people. Dow delivered sales of approximately $43 billion in 2024. References to Dow or the Company mean Dow Inc. and its subsidiaries. Learn more about us and our ambition to be the most innovative, customer-centric, inclusive and sustainable materials science company in the world by visiting www.dow.com.

Rohm and Haas is a chemicals and polymers company and has been a wholly owned subsidiary of TDCC since its acquisition on April 1, 2009.

Union Carbide Corporation is a chemicals and polymers company that has been a wholly owned subsidiary of TDCC since February 6, 2001.

For further information, please contact:

Investors:	Media:
Andrew Riker	Rachelle Schikorra
ajriker@dow.com	ryschikorra@dow.com

X: https://twitter.com/DowNewsroom 
Facebook: https://www.facebook.com/dow/ 
LinkedIn: http://www.linkedin.com/company/dow-chemical 
Instagram: http://instagram.com/dow_official 

Cautionary Statement about Forward-Looking Statements 

Certain statements in this press release are "forward-looking statements." Such statements often address expected future business and financial performance, financial condition, and other matters, and include statements describing the completion of the Tender Offer, and often contain words or phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "opportunity," "outlook," "plan," "project," "seek," "should," "strategy," "target," "will," "will be," "will continue," "will likely result," "would" and similar expressions, and variations or negatives of these words or phrases.

Forward-looking statements are based on current assumptions and expectations of future events that are subject to risks, uncertainties and other factors that are beyond Dow's control, which may cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements and speak only as of the date the statements were made. These factors include, but are not limited to: sales of Dow's products; Dow's expenses, future revenues and profitability; any sanctions, export restrictions, supply chain disruptions or increased economic uncertainty related to the ongoing conflicts between Russia and Ukraine and in the Middle East; capital requirements and need for and availability of financing; unexpected barriers in the development of technology, including with respect to Dow's contemplated capital and operating projects; Dow's ability to realize its commitment to carbon neutrality on the contemplated timeframe, including the completion and success of its integrated ethylene cracker and derivatives facility in Alberta, Canada; size of the markets for Dow's products and services and ability to compete in such markets; failure to develop and market new products and optimally manage product life cycles; the rate and degree of market acceptance of Dow's products; significant litigation and environmental matters and related contingencies and unexpected expenses; the success of competing technologies that are or may become available; the ability to protect Dow's intellectual property in the United States and abroad; developments related to contemplated restructuring activities and proposed divestitures or acquisitions such as workforce reduction, manufacturing facility and/or asset closure and related exit and disposal activities, and the benefits and costs associated with each of the foregoing; fluctuations in energy and raw material prices; management of process safety and product stewardship; changes in relationships with Dow's significant customers and suppliers; changes in public sentiment and political leadership; increased concerns about plastics in the environment and lack of a circular economy for plastics at scale; changes in consumer preferences and demand; changes in laws and regulations, political conditions or industry development; global economic and capital markets conditions, such as inflation, market uncertainty, interest and currency exchange rates, and equity and commodity prices; business, logistics, and supply disruptions; security threats, such as acts of sabotage, terrorism or war, including the ongoing conflicts between Russia and Ukraine and in the Middle East; weather events and natural disasters; disruptions in Dow's information technology networks and systems, including the impact of cyberattacks; risks related to Dow's separation from DowDuPont Inc. such as Dow's obligation to indemnify DuPont de Nemours, Inc. and/or Corteva, Inc. for certain liabilities; and any global and regional economic impacts of a pandemic or other public health-related risks and events on Dow's business.

Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled "Risk Factors" contained in Dow's and TDCC's combined Annual Report on Form 10-K for the year ended December 31, 2024. These are not the only risks and uncertainties that Dow faces. There may be other risks and uncertainties that Dow is unable to identify at this time or that Dow does not currently expect to have a material impact on its business. If any of those risks or uncertainties develops into an actual event, it could have a material adverse effect on Dow's business. Dow assumes no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

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SOURCE The Dow Chemical Company

FAQ

What is the total value of DOW's debt tender offer in 2025?

Dow's tender offer has an aggregate purchase consideration of up to $1.0 billion, excluding accrued interest.

When is the early settlement date for DOW's 2025 tender offer?

The early settlement date is expected to be March 13, 2025.

Which securities are being fully accepted in DOW's tender offer?

Dow will fully accept the 0.500% Notes Due 2027 and 7.850% Debentures Due 2029.

What is the proration factor for DOW's 7.375% Debentures Due 2029?

The 7.375% Debentures Due 2029 will be accepted with a proration factor of approximately 57.1%, for $134,209,000 in aggregate principal amount.