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TAL Education Group Prices Offering Of US$200 Million Convertible Senior Notes

BEIJING, May 16, 2014 /PRNewswire/ -- TAL Education Group (NYSE: XRS) ("TAL" or the "Company"), a leading K-12 after-school tutoring services provider in China, today announced the pricing of US$200 million in aggregate principal amount of convertible senior notes due 2019 (the "Notes"). The Notes were offered to qualified institutional buyers pursuant to Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and certain non-U.S. persons in offshore transactions in compliance with Regulation S under the Securities Act. The Company has granted to the initial purchasers a 30-day option to purchase up to an additional US$30 million principal amount of Notes. The Notes will be convertible into the Company's American Depositary Shares ("ADSs"), at the option of the holders, based on an initial conversion rate of 38.0431 of ADSs per US$1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately US$26.29 per ADS and represents an approximately 30% conversion premium over the closing trading price of the Company's ADSs on May 15, 2014, which was US$20.22 per share). The conversion rate is subject to adjustment upon the occurrence of certain events. Holders of the Notes may convert their Notes in integral multiples of US$1,000 principal amount at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. TAL will not have the right to redeem the Notes prior to maturity except for certain circumstances involving changes in the tax laws for the relevant taxing jurisdiction. Holders of the Notes will have the right to require the Company to repurchase for cash all or part of their Notes on May 15, 2017 or upon the occurrence of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

The Notes will bear interest at a rate of 2.50% per year, payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2014. The Notes will mature on May 15, 2019, unless previously repurchased or converted in accordance with their terms prior to such date.

The Company expects to use the majority of the net proceeds from this offering for strategic investments and for general corporate purposes, and less than 10% of the net proceeds to pay the cost of certain capped call transactions described below. If the initial purchasers exercise their option to purchase additional Notes, TAL expects to use less than 10% of the net proceeds from the sale of the additional Notes to enter into additional capped call transactions.

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