What is the potential effect on the yield spread of the remaining outstanding notes after the tender offer?

The tender‑offer effectively pulls the bulk of the 3.25 % 2026 senior notes out of the market, cutting the outstanding float dramatically. With supply removed, the price of the remaining notes will be bid up and the nominal yield forced lower, so the yield spread over comparable Treasuries will initially compress. In the short‑run, the market will treat the reduced issuance as a “buy‑back” signal, rewarding the notes with a tighter spread as investors re‑price the lower‑duration, higher‑quality tranche that still exists.

However, once the tender is completed the residual pool will be thinly traded and more exposed to liquidity risk. Illiquidity tends to embed a premium, so any subsequent price correction (e.g., if the remaining notes trade below the tender price) could widen the spread as market participants demand compensation for the higher holding‑cost and the uncertainty of future cash‑flow coverage. In practice, we often see a two‑stage effect: an immediate spread‑tightening as the buy‑back is announced and executed, followed by a modest re‑expansion as the post‑tender market adjusts to the new, less‑liquid supply.

Trading implication: Anticipate a brief narrowing of the 2026 note spread in the next 1‑2 weeks—use this window to sell into the rally or hedge exposure if you hold the notes. After the tender closes, monitor the post‑offer liquidity and any price drift; a widening spread could present a short‑position or a relative‑value trade against comparable 2026 senior notes that retain deeper markets. Keep an eye on the company’s credit outlook and any refinancing activity, as those fundamentals will drive the longer‑term spread trajectory.