8-KOther EventsExhibits & Filings

Archer-Daniels-Midland Co 8-K Report, Corporate Update (Apr 8, 2011)

Filed April 8, 2011For Securities:ADM

Summary

Archer-Daniels-Midland Company (ADM) filed an 8-K on April 8, 2011, to report on the settlement of a remarketing of its 4.70% Debentures due 2041, which were originally part of its equity units issued in June 2008. This remarketing resulted in the issuance of two new series of debt securities: $750 million in 4.479% Notes due 2021 and $1 billion in 5.765% Debentures due 2041. The primary purpose of this transaction was to replace the original debentures, which were pledged by equity unit holders to secure their obligation to purchase ADM common stock on June 1, 2011. The proceeds from the new debt issuances were used to purchase U.S. Treasury securities that will now serve as collateral for these purchase obligations. Any excess proceeds were distributed to the equity unit holders. This event is significant for investors as it clarifies the collateral structure supporting the company's future equity issuance and demonstrates ADM's proactive management of its debt obligations.

Key Highlights

  • 1ADM settled the remarketing of $1.75 billion of its 4.70% Debentures due 2041 on April 4, 2011.
  • 2The remarketing resulted in the issuance of $750 million of 4.479% Notes due 2021 and $1 billion of 5.765% Debentures due 2041.
  • 3The original debentures were part of equity units issued in June 2008 and were pledged to secure the obligation of unit holders to purchase ADM common stock.
  • 4The proceeds from the new debt issuances were used to purchase U.S. Treasury securities to collateralize the future purchase of ADM common stock.
  • 5Equity unit holders received any proceeds from the remarketing in excess of the cost of the U.S. Treasury securities.
  • 6The transaction effectively replaces the original debentures with newly collateralized securities for the equity purchase obligation.
  • 7The filing includes the execution of a Third Supplemental Indenture and legal opinions regarding the new securities.

Frequently Asked Questions

The main purpose was to replace the original 4.70% Debentures, which were pledged by holders of ADM's equity units to secure their commitment to purchase ADM common stock in the future. The remarketing created new debt instruments whose proceeds were used to purchase U.S. Treasury securities, which now serve as collateral for that future stock purchase obligation.

As a result of the remarketing, ADM issued two new series of debt: $750 million in aggregate principal amount of 4.479% Notes due 2021 and $1 billion in aggregate principal amount of 5.765% Debentures due 2041.

This transaction affects equity unit holders by replacing the collateral backing their obligation to purchase ADM common stock. The original debentures are gone, replaced by U.S. Treasury securities purchased with the proceeds from the new debt. Additionally, any proceeds from the remarketing that exceeded the cost of purchasing these Treasury securities were distributed to the equity unit holders.

The new debt instruments have different maturity dates: the 4.479% Notes are due in 2021, and the 5.765% Debentures are due in 2041.