TELEPHONE AND DATA SYSTEMS, INC. (a Delaware corporation) Debt Securities TERMS AGREEMENT
Exhibit 1.2
TELEPHONE AND DATA SYSTEMS, INC.
(a Delaware corporation)
Debt Securities
TERMS AGREEMENT
November 26, 2012
To: Telephone and Data Systems, Inc.
30 N. LaSalle, Suite 4000
Chicago, Illinois 60602
Ladies and Gentlemen:
We understand that Telephone and Data Systems, Inc., a Delaware corporation (the “Company”), proposes to issue and sell $175,000,000 aggregate principal amount of its senior debt securities (the “Securities”) (such securities also being hereinafter referred to as the “Initial Underwritten Securities”). Subject to the terms and conditions set forth or incorporated by reference herein, the underwriters named below (the “Underwriters”) offer to purchase, severally and not jointly, the principal amount of Initial Underwritten Securities opposite their names set forth below at the purchase price set forth below, and a proportionate share of Option Underwritten Securities set forth below, to the extent any are purchased.
| Underwriters |
| Principal Amount |
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| Citigroup Global Markets Inc. |
| $ | 36,093,750 |
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| Merrill Lynch, Pierce, Fenner & Smith |
| 36,093,750 |
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| UBS Securities LLC |
| 36,093,750 |
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| Wells Fargo Securities, LLC |
| 36,093,750 |
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| RBC Capital Markets, LLC |
| 8,750,000 |
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| BNY Mellon Capital Markets, LLC |
| 3,500,000 |
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| Comerica Securities, Inc. |
| 3,500,000 |
| |
| TD Securities (USA) LLC |
| 3,500,000 |
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| U.S. Bancorp Investments, Inc. |
| 3,500,000 |
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| BB&T Capital Markets, a division of Scott & Stringfellow, LLC |
| 875,000 |
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| Blaylock Robert Van, LLC |
| 875,000 |
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| Cabrera Capital Markets, LLC |
| 875,000 |
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| CastleOak Securities, L.P. |
| 875,000 |
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| Janney Montgomery Scott LLC |
| 875,000 |
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| KeyBanc Capital Markets Inc. |
| 875,000 |
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| Samuel A. Ramirez & Co., Inc. |
| 875,000 |
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| Robert W. Baird & Co. Incorporated |
| 875,000 |
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| The Williams Capital Group, L.P. |
| 875,000 |
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| Total |
| $ | 175,000,000 |
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The Underwritten Securities shall have the following terms:
Debt Securities
| Title: |
| 5.875% Senior Notes due 2061 |
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| Rank: |
| Senior unsecured obligations of the Company |
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| Aggregate principal amount of Initial Underwritten Securities: |
| $175,000,000 |
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| Option Underwritten Securities: |
| $25,000,000 aggregate principal amount of Notes, at the public offering price, less the underwriting discount |
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| Denominations: |
| $25 and integral multiples in excess thereof |
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| Currency of payment: |
| US Dollars |
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| Interest rate: |
| 5.875% per annum |
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| Interest payment dates: |
| March 1, June 1, September 1 and December 1, beginning March 1, 2013 |
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| Regular record dates: |
| The first business day preceding the respective interest payment date |
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| Stated maturity date: |
| December 1, 2061 |
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| Redemption provisions: |
| The Notes may be redeemed, in whole or in part, at the Company’s option at any time on and after December 1, 2017 at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest to the redemption date |
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| Sinking fund requirements: |
| None |
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| Conversion provisions: |
| None |
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| Listing requirements: |
| NYSE within 30 days of settlement date |
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| CUSIP / ISIN: |
| 879433 795 / US8794337951 |
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| Black-out provisions: |
| November 26, 2012 through December 3, 2012 |
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| Price to Public: |
| $25 per Note; 100% of the principal amount, plus accrued interest, if any, from December 3, 2012 |
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| Purchase price: |
| $24.2125 per Note; 96.85% of principal amount, plus accrued interest, if any, from December 3, 2012 |
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| Form: |
| Book-entry only |
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| Other terms and conditions: |
| None |
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| Initial Sale Time: |
| 4:40 P.M., New York City time, on November 26, 2012 |
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| Free writing prospectuses included in Disclosure Package (See Section 1(a)(2)): |
| Free writing prospectuses, dated November 26, 2012 |
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| Electronic road show or other written communications included in Company Additional Written Communication (See Section 1(a)(7)): |
| None |
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| Closing date and location: |
| December 3, 2012 at the offices of Sidley Austin LLP, One S. Dearborn Street, Chicago, Illinois 60603 |
All of the provisions contained in the document attached as Annex I hereto entitled “TELEPHONE AND DATA SYSTEMS, INC. — Debt Securities — Final Term Sheet” as was filed with the Securities and Exchange Commission on November 26, 2012, and the document attached as Annex II hereto entitled “TELEPHONE AND DATA SYSTEMS, INC. — Debt Securities — Underwriting Agreement” are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined.
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Please accept this offer no later than 6:00 o’clock P.M. (New York City time) on November 26, 2012 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
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| Very truly yours, | ||||||
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| CITIGROUP GLOBAL MARKETS INC. | ||||||
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| MERRILL LYNCH, PIERCE, FENNER & SMITH | ||||||
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| INCORPORATED | ||||||
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| UBS SECURITIES LLC | ||||||
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| WELLS FARGO SECURITIES, LLC | ||||||
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| As Representatives of the Several | ||||||
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| Underwriters Referred to Below | ||||||
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| BY: WELLS FARGO SECURITIES, LLC |
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| By: | /s/ Carolyn Hurley | |||||
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| Name: | Carolyn Hurley | ||||
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| Title: | Director | ||||
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| Acting on behalf of itself and the other named Underwriters. | ||||||
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| Accepted: |
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| TELEPHONE AND DATA SYSTEMS, INC. |
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| By | /s/ LeRoy T. Carlson, Jr. |
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| Name: | LeRoy T. Carlson, Jr. |
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| Title: | President and Chief Executive Officer |
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| By | /s/ Kenneth R. Meyers |
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| Name: | Kenneth R. Meyers |
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| Title: | Executive Vice President and Chief Financial Officer |
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[Signature Page to the Terms Agreement]
Annex I to Terms Agreement
Form of Pricing Term Sheet
Free Writing Prospectus
(To Prospectus dated November 26, 2012 and
Preliminary Prospectus Supplement Dated November 26, 2012)
$175,000,000
Telephone and Data Systems, Inc.
5.875% Senior Notes due 2061
Pricing Term Sheet
| Issuer: | Telephone and Data Systems, Inc. |
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| Security: | 5.875% Senior Notes due 2061 |
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| Principal Amount: | $175,000,000 |
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| Over-Allotment Option: | The underwriters may purchase up to an additional $25,000,000 principal amount of notes, at the public offering price, less the underwriting discount, within 30 days from the date of the prospectus supplement to cover over-allotments, if any |
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| Denominations: | $25 and integral multiples in excess thereof |
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| Trade Date: | November 26, 2012 |
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| Settlement Date: | December 3, 2012 (T+5) |
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| Maturity Date: | December 1, 2061 |
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| Coupon: | 5.875% |
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| Interest Payment Dates: | March 1, June 1, September 1 and December 1, commencing March 1, 2013 |
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| Price to Public: | $25 per note |
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| Optional Redemption: | The Issuer may redeem the Notes, in whole or in part, at any time on and after December 1, 2017 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date |
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| Use of Proceeds: | The net proceeds to be received by the Issuer from the offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Issuer, are estimated to be approximately $168.9 million |
A-I-1
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| (or $193.1 million if the underwriters exercise their overallotment option in full). The net proceeds will be used for general corporate purposes, including acquisitions |
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| Listing: | The Issuer intends to apply to list the Notes on the New York Stock Exchange under the symbol “TDA.” If the application is approved, trading in the Notes on the New York Stock Exchange is expected to begin within 30 days after the Settlement Date |
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| CUSIP/ISIN: | 879433 795/US8794337951 |
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| Anticipated Ratings*: |
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| Joint Book-Running Managers: | Citigroup Global Markets Inc. |
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| Co-Managers: | RBC Capital Markets, LLC |
*Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering.
You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll-free at ###-###-#### or e-mail ***@***; or Merrill Lynch, Pierce, Fenner & Smith Incorporated toll-free at ###-###-#### or e-mail ***@***; or UBS Securities LLC toll-free at ###-###-####, extension ###-###-####; or Wells Fargo Securities, LLC toll-free at ###-###-#### or e-mail ***@***.
A-I-2
Annex II to Terms Agreement
TELEPHONE AND DATA SYSTEMS, INC.
Underwriting Agreement
[see Exhibit 1.1]
