Dow Announces Plans to Retire Debt in the First Quarter

MIDLAND, Mich.--(BUSINESS WIRE)--The Dow Chemical Company (NYSE: DOW) announced today that it is launching a cash tender offer for approximately $750 million aggregate principal amount of notes listed by Dow and its subsidiaries.

This announcement follows a series of debt reduction activities the Company plans to execute in the first quarter, including the pay-off of $800 million of matured debt and more than $150 million of InterNotes. Taken together, these actions will enable Dow to reduce its overall debt by more than $1.5 billion.

“Our actions this quarter will enable us to deliver a structural reduction in interest expense, and the result is accretive to shareholders,” said Bill Weideman, Dow’s executive vice president and chief financial officer. “It’s also important to note that, after retiring this debt, we will still have a cash balance that is higher than our historical average, which illustrates our strengthened capital structure and enhanced financial flexibility.”

Today’s cash tender offer addresses high-coupon debt, some of which was issued during the global economic crisis of 2009.

Details regarding the cash tender offer:

The Dow Chemical Company today has commenced cash tender offers for up to (i) $450 million aggregate principal amount of the notes listed under “Pool 1 Notes” in the table below issued by Dow and its subsidiary Union Carbide Corporation and (ii) $300 million aggregate principal amount of the notes listed under “Pool 2 Notes” in the table below issued by Dow and its subsidiary Rohm and Haas Company.

Following consummation of the tender offers, the notes that are accepted will be purchased, retired and cancelled by the relevant issuer. The price paid in the offers will be determined based on the yield to maturity of a U.S. Treasury Reference Security plus a spread determined using a modified “Dutch Auction” method, all as more fully described in the Offer to Purchase and related documents. Notes validly tendered and not withdrawn on or before 5:00 p.m., New York City time, on March 8, 2011 (the “early participation date”) will receive total consideration including an early participation amount equal to $30.00 per $1,000 principal amount of notes. Notes tendered after the early participation date but prior to the expiration date, which is 12:00 midnight, New York City time, on March 22, 2011, will not receive the early participation amount. Tendered notes may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on March 8, 2011, unless extended by Dow. Notes tendered after the withdrawal date may not be withdrawn. The tender offers are subject to proration if oversubscribed.

The notes subject to purchase and other information relating to the tender offers are listed in the table below:

				Acceptable Bid Spread Range (bps)
Title of Security/Issuer	CUSIP Number	Principal Amount Outstanding (MM)	Early Participation Amount(1)	Minimum Spread	Maximum/Base Spread	U.S. Treasury Reference Security	Bloomberg Reference Page
Pool 1 Notes
8.550% Notes due 2019/Dow	260543BX0	$3,250.0	$30.00	90	120	3.625% due February 15, 2021	PX1
7.750% Debentures due 2096/Union Carbide	905581AS3	$200.0	$30.00	260	290	4.250% due November 15, 2040	PX1
Pool 2 Notes
9.400% Notes due 2039/Dow	260543BY8	$1,000.0	$30.00	110	140	4.250% due November 15, 2040	PX1
7.850% Debentures due 2029/Rohm and Haas	775371AU1	$881.8	$30.00	140	170	4.250% due November 15, 2040	PX1

(1) Per $1,000 principal amount of notes accepted for purchase.

Dow has retained Goldman, Sachs & Co. and J.P. Morgan Securities LLC, as Lead Dealer Managers, and ING Financial Markets LLC, RBC Capital Markets, LLC and Scotia Capital (USA) Inc., as co-Dealer Managers, for the tender offers. Global Bondholder Services Corporation is the Information Agent and Depositary for the tender offers. For additional information regarding the terms of the tender offers, please contact: Goldman, Sachs & Co. at [phone] (toll-free) or (212)-902-5128 (collect) or J.P. Morgan Securities LLC at [phone] (toll-free) or [phone] (collect). Requests for documents and questions regarding the tendering of notes may be directed to Global Bondholder Services Corporation at [phone] (for banks and brokers only) or [phone] (for all others toll-free).

This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The offers are being made solely pursuant to the Offer to Purchase and related documents made available to holders of the notes.

About Dow

Dow (NYSE: Dow) combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company’s more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.

Union Carbide Corporation is a chemicals and polymers company that has been a wholly owned subsidiary of The Dow Chemical Company since 2001.

Rohm and Haas Company is a premier specialty materials company and has been a wholly owned subsidiary of The Dow Chemical Company since 2009.