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Altria Announces Cash Tender Offer For A Portion Of Its Long-Term Debt

Altria Group, Inc. (Altria) (NYSE: MO) today announced that it is commencing a cash tender offer for up to $2,000,000,000 aggregate principal amount (the “Tender Cap”) of its senior unsecured notes identified in the table below (the “Notes”). The offer will permit Altria to reduce its debt scheduled to mature in certain future years. Concurrently, Altria commenced an underwritten public offering of senior unsecured notes (the “New Notes”). Altria expects these transactions to reduce the weighted average coupon rate and future interest expense of its consolidated debt.

The terms and conditions of the tender offer are described in the Offer to Purchase, dated August 6, 2012 and the related Letter of Transmittal. The following table sets forth the Notes subject to the tender offer and certain information relating to pricing for the tender offer.
                                 

Title of

Securities
 

CUSIP Number
 

Outstanding Principal Amount
 

Acceptance Priority Level
 

Aggregate Maximum Purchase Sublimit*
 

Early Tender Payment**
 

U.S. Treasury Reference Security
 

Fixed Spread (bps)
 

Bloomberg Reference Page

9.700% Notes due 2018
  02209SAD5  

$3,100,000,000
     

$30
 

0.500% dueJuly 31, 2017
 

135
 

FIT1
1 Not Applicable

9.250% Notes due 2019
  02209SAJ2  

$2,200,000,000
         

$30
 

1.750% dueMay 15, 2022
 

80
 

FIT1

9.950% Notes due 2038
02209SAE3

$1,500,000,000

$30

3.125% dueFebruary 15, 2042

235

FIT1
2

$500,000,000

10.200% Notes due 2039
  02209SAH6  

$1,500,000,000
         

$30
 

3.125% dueFebruary 15, 2042
 

240
 

FIT1

*Applies to the aggregate principal amount of Notes with Acceptance Priority Level 2.

**Per $1,000 principal amount of Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline and accepted for purchase.

The amount of each series of Notes that may be accepted for purchase will be determined in accordance with the Acceptance Priority Levels set forth in the table above and may be prorated as described in the Offer to Purchase. All Notes validly tendered and not validly withdrawn of a series with Acceptance Priority Level 1 will be accepted for purchase before any Notes of a series with Acceptance Priority Level 2 are accepted for purchase. Upon the terms and subject to the conditions of the tender offer, if the aggregate principal amount of all Notes with Acceptance Priority Level 1 validly tendered and not validly withdrawn exceeds the Tender Cap, such Notes will be accepted for purchase on a prorated basis as described in the Offer to Purchase, such that the aggregate principal amount of the Notes accepted in the tender offer equals the Tender Cap. In that event, no Notes with Acceptance Priority Level 2 will be accepted for purchase.

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