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 16, 2010
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 $200,000,000 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. |
| $ | 38,500,000 |
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| Merrill Lynch, Pierce, Fenner & Smith Incorporated |
| 38,500,000 |
| |
| UBS Securities LLC |
| 38,500,000 |
| |
| Wells Fargo Securities, LLC |
| 38,500,000 |
| |
| RBC Capital Markets, LLC |
| 10,000,000 |
| |
| BNY Mellon Capital Markets, LLC |
| 4,000,000 |
| |
| Comerica Securities, Inc. |
| 4,000,000 |
| |
| SunTrust Robinson Humphrey, Inc. |
| 4,000,000 |
| |
| TD Securities (USA) LLC |
| 4,000,000 |
| |
| U.S. Bancorp Investments, Inc. |
| 4,000,000 |
| |
| BB&T Capital Markets, a division of Scott & Stringfellow, Inc. |
| 1,000,000 |
| |
| Janney Montgomery Scott LLC |
| 1,000,000 |
| |
| Keefe, Bruyette & Woods, Inc. |
| 1,000,000 |
| |
| Mesirow Financial, Inc. |
| 1,000,000 |
| |
| Morgan Keegan & Company, Inc. |
| 1,000,000 |
| |
| Oppenheimer & Co. Inc. |
| 1,000,000 |
| |
| Raymond James & Associates Inc. |
| 1,000,000 |
| |
| Robert W. Baird & Co. Incorporated |
| 1,000,000 |
| |
| Stifel, Nicolaus & Company, Incorporated |
| 1,000,000 |
| |
| B.C. Ziegler and Company |
| 650,000 |
| |
| Blaylock Robert Van, LLC |
| 650,000 |
| |
| Cabrera Capital Markets, LLC |
| 650,000 |
| |
| CastleOak Securities, L.P. |
| 650,000 |
| |
| D.A. Davidson & Co. |
| 650,000 |
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| Davenport & Company LLC |
| 625,000 |
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| Fidelity Capital Markets, A Division of National Financial Services LLC |
| 625,000 |
| |
| J.J.B. Hilliard, W.L. Lyons, Inc. |
| 625,000 |
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| KeyBanc Capital Markets Inc. |
| 625,000 |
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| Samuel A. Ramirez & Co., Inc. |
| 625,000 |
| |
| The Williams Capital Group, L.P. |
| 625,000 |
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| Total |
| $ | 200,000,000 |
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The Underwritten Securities shall have the following terms:
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| Debt Securities | |
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| Title: |
| 6.875% Senior Notes due 2059 |
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| Rank: |
| Senior unsecured obligations of the Company |
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| Aggregate principal amount of Initial Underwritten Securities: |
| $200,000,000 |
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| Option Underwritten Securities: |
| $30,000,000 aggregate principal amount of Notes,at the public offering price, less the underwriting discount |
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| Denominations: |
| $25 and integral multiples thereof |
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| Currency of payment: |
| US Dollars |
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| Interest rate: |
| 6.875% per annum |
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| Interest payment dates: |
| February 15, May 15, August 15 and November15, beginning on February 15, 2011 |
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| Regular record dates: |
| The first business day preceding the respective interest payment date |
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| Stated maturity date: |
| November 15, 2059 |
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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 November 15, 2015 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 845 /US8794338454 |
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| Black-out provisions: |
| November 16, 2010 through November 23, 2010 |
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| Price to Public: |
| $25 per Note; 100% of the principal amount, plus accrued interest, if any, from November 23, 2010 |
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| Purchase price: |
| $24.21 per Note; 96.85% of principal amount, plus accrued interest, if any, from November 23, 2010 |
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| Form: |
| Book-entry only |
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| Other terms and conditions: |
| None |
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| Initial Sale Time: |
| 12:00 P.M., New York City time, on November 16, 2010 |
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| Free writing prospectuses included in |
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| Disclosure Package (See Section 1(a)(2)): |
| Free writing prospectuses, dated November 16, 2010 |
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| Electronic road show or other written |
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| communications included in Company |
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| Additional Written Communication |
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| (See Section 1(a)(7)): |
| None |
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| Closing date and location: |
| November 23, 2010 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 16, 2010, 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.
3
Please accept this offer no later than 4:00 o’clock P.M. (New York City time) on November 16, 2010 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: CITIGROUP GLOBAL MARKETS INC. | ||||
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| By: | /s/ Brian D. Bednarski | |||
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| Authorized Signatory | ||||
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| Acting on behalf of itself and the other named Underwriters. | |||
Accepted:
| 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 | ||||
[Signature Page to the Terms Agreement]
Filed Pursuant to Rule 433
Registration No. 333-155078
November ·, 2010
Annex I to Terms Agreement
Form of Pricing Term Sheet
TELEPHONE AND DATA SYSTEMS, INC.
·% Senior Notes due
Pricing Term Sheet
| Issuer: |
| Telephone and Data Systems, Inc. |
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| Security: |
| ·% Senior Notes due |
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| Principal Amount: |
| $· |
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| Over-Allotment Option: |
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| Denominations: |
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| Trade Date: |
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| Settlement Date: |
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| Maturity Date: |
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| Coupon: |
| ·% |
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| Interest Payment Dates: |
| ·, ·, · and ·, commencing ·, 2011 |
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| Price to Public: |
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| Optional Redemption: |
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| Listing: |
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| CUSIP/ISIN: |
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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 |
A-I-1
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 Merrill Lynch, Pierce, Fenner & Smith Incorporated toll-free at ###-###-#### or email ***@***; or UBS Securities LLC toll-free at ###-###-####; or
Wells Fargo Securities, LLC toll-free at ###-###-#### or email ***@***.
A-I-2
Annex II to Terms Agreement
TELEPHONE AND DATA SYSTEMS, INC.
Underwriting Agreement
[see Exhibit 1.1]
