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Altria begins cash tender offer for some of its long-term debt

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Richmond-based Altria Group Inc. has begun a cash tender offer for up to $2 billion of its senior unsecured debt.

At the same time, Altria has begun a public offering of new senior unsecured notes. The company expects these transactions to reduce interest expense of its consolidated debt.

Altria expects to record a one-time pre-tax charge of approximately $1 billion or 33 cents per share against reported earnings in the third quarter of 2012, reflecting the estimated loss on early extinguishment of debt related to the debt tender offer.

The notes subject to the tender offer include 9.7 percent notes due 2018; 9.25 percent notes due 2019; 9.95 percent due 2038 and 10.2 percent notes due 2039.

The tender offer for the notes will expire at midnight, New York City time, on Friday, Aug. 31.

Altria expects to use the net proceeds from the issuance of the new notes to fund the purchase of the old notes accepted in the tender offer and for general corporate purposes.

The company revised its 2012 full-year guidance for reported diluted earnings per share from a range of $2.29 to $2.33 to a range of $1.96 to $2.


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