On February 7, 2025, FedEx Corp. (NYSE: FDX) released a significant update regarding its ongoing Exchange Offers and Consent Solicitations for its outstanding senior notes. The company has extended the expiration date for these offers, providing bondholders with additional time to participate in the exchange process.

1. Extension of Expiration Date

Originally set to expire on February 6, 2025, the expiration date for the Exchange Offers and Consent Solicitations has been pushed back to February 21, 2025, at 5:00 p.m. New York City time. This extension aims to accommodate eligible holders of FedEx's outstanding senior notes who wish to exchange their existing notes for new notes. The right for holders to withdraw their tendered Existing Notes expired on January 22, 2025, at 5:00 p.m. New York City time.

The company has emphasized that the settlement date for each Exchange Offer and Consent Solicitation will occur promptly after the new expiration date.

2. Exchange Consideration Details

For holders of Existing USD Notes and Existing Euro Notes who validly tender their notes by the Early Participation Date, the consideration includes:

Exchange Consideration: $970 principal amount of New USD Notes or €970 principal amount of New Euro Notes for each $1,000 principal amount of Existing Notes.

Early Participation Payment: An additional $30 principal amount of New USD Notes and $2.50 in cash or €30 principal amount of New Euro Notes and €2.50 in cash.

This brings the total consideration to approximately $1,000 for each $1,000 tendered, contingent upon valid participation by the Early Participation Date.

3. Amendments to Terms

FedEx has also made amendments to the terms of the Exchange Offers regarding specific series of notes, including the 3.875% Notes due 2042, 4.050% Notes due 2048, 4.950% Notes due 2048, and 5.250% Notes due 2050. Holders who tender these notes after the prior expiration date will now receive $1,000 in New USD or Euro Notes for each $1,000 of Existing Notes tendered, but they will no longer qualify for the cash portion of the Early Participation Payment.

Conversely, eligible holders of the Non-Majority Existing Notes (4.200% Notes due 2028, 4.250% Notes due 2030, and 1.300% Notes due 2031) will continue to be eligible for total consideration, including the cash portion of the Early Participation Payment, if they tender their notes after the prior expiration date but before the new expiration date.

4. Majority and Non-Majority Existing Notes

FedEx's press release highlighted that the requisite number of consents had been received for several series of Majority Existing Notes. Below are some key figures:

3.400% Notes due 2028: $500 million outstanding with $331.47 million tendered (66.29%).

3.100% Notes due 2029: $1 billion outstanding with $626.35 million tendered (62.63%).

2.400% Notes due 2031: $1 billion outstanding with $603.60 million tendered (60.36%).

However, the company reported that the necessary consents had not been received for the Non-Majority Existing Notes, which include:

4.200% Notes due 2028: $400 million outstanding with $192 million tendered (48%).

4.250% Notes due 2030: $750 million outstanding with $334.69 million tendered (44.62%).

1.300% Notes due 2031: €500 million outstanding with €145 million tendered (29.02%).

5. Implications of the Separation

The Exchange Offers and Consent Solicitations are part of FedEx's broader strategy, which includes a significant Separation of its Freight business into a new publicly traded company. The completion of the Separation is not contingent upon the Exchange Offers or Consent Solicitations, nor vice versa, indicating a strategic move towards operational independence for its Freight division.

6. Conclusion

FedEx's decision to extend the expiration date for its Exchange Offers and amend the terms reflects its commitment to providing flexibility for its bondholders during this transitional phase. As the company navigates the complexities of its Separation and the associated financial restructuring, the outcomes of these offers will be crucial in shaping its capital structure and future growth trajectory.

For eligible holders interested in participating in the Exchange Offers, detailed terms and conditions are available in the Offering Memorandum, which outlines the complete process for tendering Existing Notes.

Original press release