Bond Reynolds American Corporation 8.125% ( US761713BV72 ) in USD

Reynolds American Corporation

113.592 % ▼

United States

US761713BV72 ( in USD )

8.125% per year ( payment 2 times a year)

30/04/2040

Prospectus brochure of the bond Reynolds American Inc US761713BV72 en USD 8.125%, maturity 30/04/2040

761713BV7

BBB+ ( Lower medium grade - Investment-grade )

Baa1 ( Lower medium grade - Investment-grade )

30/10/2025 ( In 169 days )

Reynolds American Inc. was a leading U.S. tobacco company, later acquired by British American Tobacco in 2017.

The Bond issued by Reynolds American Corporation ( United States ) , in USD, with the ISIN code US761713BV72, pays a coupon of 8.125% per year.
The coupons are paid 2 times per year and the Bond maturity is 30/04/2040

The Bond issued by Reynolds American Corporation ( United States ) , in USD, with the ISIN code US761713BV72, was rated Baa1 ( Lower medium grade - Investment-grade ) by Moody's credit rating agency.

The Bond issued by Reynolds American Corporation ( United States ) , in USD, with the ISIN code US761713BV72, was rated BBB+ ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

424B5
424B5 1 d73137d424b5.htm 424B5
Table of Contents
Filed pursuant to Rule 424(b)(5)
Registration No. 333-207802
PROSPECTUS

OFFERS TO EXCHANGE
All Outstanding Notes of the Series Specified Below
THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON DECEMBER 17, 2015, UNLESS EXTENDED

Old Notes to be Exchanged

CUSIP Nos.

Outstanding Principal Amount
3.500% Senior Notes due 2016

761713 BH8
U8001F AL9
$414,793,000
2.300% Senior Notes due 2017

761713 BJ4
U8001F AM7
$447,092,000
8.125% Senior Notes due 2019

761713 BK1
U8001F AN5
$668,689,000
6.875% Senior Notes due 2020

761713 BL9
U8001F AP0
$641,462,000
3.750% Senior Notes due 2023

761713 BM7
U8001F AQ8
$473,689,000
8.125% Senior Notes due 2040

761713 BN5
U8001F AR6
$236,748,000
7.000% Senior Notes due 2041

761713 BP0
U8001F AS4
$240,197,000
We are offering to exchange any and all of each series of our outstanding notes listed above, referred to as the old notes, for a series of our
newly issued notes, referred to as the new notes, having the same interest payment and maturity dates and interest rate provisions (other than with
respect to certain rights to additional interest, as described herein) as the corresponding series of old notes and the related guarantees of certain of
our subsidiaries described herein, referred to as an Exchange Offer and collectively, the Exchange Offers, upon the terms and conditions set forth
in this prospectus. We refer to the old notes and new notes collectively as the notes. The form and terms of each series of new notes will be
substantially the same as the form and terms of the corresponding series of old notes, except that the offer and sale of the new notes have been
registered under the Securities Act of 1933, as amended, referred to as the Securities Act, and will not have transfer restrictions, registration rights
or certain rights to additional interest that the old notes have. Each new note will be issued in the same principal amount as the old note for which it
is exchanged. The new notes will be issued under the same indenture as the old notes. The old notes were issued in private offerings on July 15,
2015 in exchange for certain outstanding senior notes originally issued by Lorillard Tobacco Company LLC (f/k/a Lorillard Tobacco Company).
We may redeem the new notes in whole or in part at any time after the issuance on the terms and conditions set forth in such notes and the
RAI indenture, as described herein. See "Description of the New Notes--Optional Redemption." Like the old notes, the new notes will be our
senior unsecured obligations ranking equally in right of payment with all of our other senior indebtedness from time to time outstanding.
Material Terms of the Exchange Offers

· We will exchange all old notes validly tendered and not properly withdrawn prior to the expiration of the Exchange Offers for an equal

principal amount of new notes. You may withdraw tenders of the old notes at any time prior to the expiration of the Exchange Offers.

· The Exchange Offers are not conditioned upon any minimum principal amount of old notes being tendered for exchange. The Exchange

Offers are subject to certain conditions. For more information, see "The Exchange Offers--Conditions."

· An exchange of old notes for new notes will not be a taxable transaction for U.S. federal income tax purposes.

· We will not receive any cash proceeds from the Exchange Offers.

· There is no existing market for the new notes, and we do not intend to apply for their listing on any securities exchange or arrange for them to

be quoted on any quotation system. An active trading market for the new notes may not develop, which could make selling the new notes
difficult.
You should carefully consider the risk factors beginning on page 19 of this prospectus before participating in the Exchange Offers.
Each broker-dealer that receives new notes for its own account pursuant to the Exchange Offers must acknowledge that it will deliver a
prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange
for old notes where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. See "Plan
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
of Distribution."
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 18, 2015.
Table of Contents
TABLE OF CONTENTS

Page
GLOSSARY

i
SUMMARY

1
RISK FACTORS

19
FORWARD-LOOKING STATEMENTS

31
INDUSTRY DATA

35
THE EXCHANGE OFFERS

36
RATIO OF EARNINGS TO FIXED CHARGES

49
USE OF PROCEEDS

50
CAPITALIZATION

50
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

52
DESCRIPTION OF MATERIAL INDEBTEDNESS

59
DESCRIPTION OF THE NEW NOTES

60
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

80
PLAN OF DISTRIBUTION

85
LEGAL MATTERS

86
EXPERTS

86
WHERE YOU CAN FIND MORE INFORMATION

87
INCORPORATION BY REFERENCE

87
No dealer, salesperson or other person has been authorized to give any information or to make any representations in connection with the
Exchange Offers other than those contained or incorporated by reference in this prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by us. You should assume that the information contained or incorporated by
reference in this prospectus is accurate only as of the date of this prospectus or the date of the document incorporated by reference. Neither the
delivery of this prospectus nor any exchanges or sales made hereunder shall under any circumstances create an implication that there has been no
change in our affairs or that of our subsidiaries since then.
This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the securities to which it
relates, nor does it constitute an offer to sell or the solicitation of an offer to buy such securities, in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such an offer or solicitation.

This prospectus incorporates important business and financial information about us that is not included in or delivered with this
prospectus. We will provide without charge to each person to whom this prospectus is delivered, upon written or oral request, a copy of
any such information. Requests for such information should be directed to: Office of the Secretary, P.O. Box 2990, Winston-Salem, North
Carolina 27102-2990; telephone number (336) 741-5162. To obtain timely delivery, you must request the information no later than five
business days before the expiration of the Exchange Offers, or no later than December 10, 2015.

Table of Contents
GLOSSARY
Unless otherwise indicated, references to "RAI," "we," "us" and "our" refer to Reynolds American Inc., a North Carolina corporation, and
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
not to any of its existing or future subsidiaries. In addition, references to:

· "2019 new notes" means RAI's 8.125% Senior Notes due 2019 to be issued in the Exchange Offer for the 2019 old notes;

· "2019 old notes" means RAI's outstanding 8.125% Senior Notes due 2019;

· "2023 new notes" means RAI's 3.750% Senior Notes due 2023 to be issued in the Exchange Offer for the 2023 old notes;

· "2023 old notes" means RAI's outstanding 3.750% Senior Notes due 2023;

· "American Snuff" means the RAI reportable operating segment comprised of the primary operations of American Snuff Company,

LLC, a Delaware limited liability company;

· "asset purchase agreement" means the Asset Purchase Agreement, dated as of July 15, 2014, as amended, among RAI, Imperial Sub

and Imperial;

· "ATOP" means DTC's Automated Tender Offer Program;

· "B&W" means Brown & Williamson Holdings, Inc., a Delaware corporation and wholly owned subsidiary of BAT and RAI's largest

shareholder;

· "BAT share purchase" means the subscription and purchase simultaneously with the closing of the Lorillard merger on June 12, 2015
by BAT, indirectly through its wholly owned subsidiary, Louisville Securities Limited, of approximately 77.7 million shares of RAI

common stock (prior to giving effect to the two-for-one stock split of RAI's common stock on August 31, 2015) for an aggregate
purchase price of approximately $4.7 billion such that BAT, directly or indirectly through its affiliates, maintained its approximately
42% beneficial ownership interest in RAI immediately following completion of the Lorillard merger;

· "BAT" means British American Tobacco p.l.c., a public limited company incorporated under the laws of England and Wales and

B&W's parent;

· "Code" means the Internal Revenue Code of 1986, as amended;

· "DTC" means The Depository Trust Company;

· "divestiture" means the transactions contemplated by the asset purchase agreement and the transfer agreement pursuant to which the

transferred assets were acquired by Imperial Sub on June 12, 2015;

· "FDA" means the U.S. Food and Drug Administration;

· "Imperial Sub" means ITG Brands, LLC, a Texas limited liability company and wholly owned subsidiary of Imperial (formerly known

as Lignum-2, L.L.C.);

· "Imperial" means Imperial Tobacco Group PLC, a public limited company incorporated under the laws of England and Wales;

· "international NAS business" means the operations of Santa Fe's NATURAL AMERICAN SPIRIT brand outside of the United States;

· "IRI/Capstone" means SymphonyIRI Group, Inc. and Capstone Research Inc.

· "IRS" means the U.S. Internal Revenue Service;

· "Japan Tobacco" means Japan Tobacco Inc., a Japanese corporation (kabushiki kaisha) and the parent of JTIH;

i
Table of Contents

· "JTIH" means JT International Holding BV, a Dutch private company with limited liability;

· "Japan Tobacco purchase agreement" means the purchase agreement, dated as of September 28, 2015, and entered into by and among

JTIH, SFNTC, R. J. Reynolds Global Products, Inc. and R. J. Reynolds Tobacco B.V, and, for certain provisions of the agreement and
as guarantors, Japan Tobacco and RAI, related to the proposed sale to JTIH;

· "Lorillard" means Lorillard, LLC (f/k/a Lorillard, Inc.), a Delaware limited liability company, and its successors;

· "Lorillard merger" means the merger of merger sub with and into Lorillard on June 12, 2015, with Lorillard surviving as a wholly

owned subsidiary of RAI, pursuant to the merger agreement;

· "Lorillard Tobacco" means Lorillard Tobacco Company LLC (f/k/a Lorillard Tobacco Company), a Delaware limited liability
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5

company, and its successors (including RJR Tobacco pursuant to the Lorillard Tobacco merger);

· "Lorillard Tobacco indenture" means the indenture, dated June 23, 2009, as supplemented, pursuant to which the Lorillard Tobacco
notes were issued; references to provisions of the Lorillard Tobacco indenture shall be deemed to include references to the

supplemental indentures to the Lorillard Tobacco indenture, including those pursuant to which individual series of Lorillard Tobacco
notes were established;

· "Lorillard Tobacco merger" means the merger of Lorillard Tobacco with and into RJR Tobacco, with RJR Tobacco surviving as a

direct, wholly owned subsidiary of RJR, which occurred shortly after the completion of the Lorillard merger;

· "Lorillard Tobacco notes" means the seven series of senior unsecured notes originally issued by Lorillard Tobacco, guaranteed by

Lorillard, in the aggregate outstanding principal amount of $3.5 billion that were subject to the private exchange offers;

· "Lorillard transactions" means the Lorillard merger and the other transactions contemplated by the merger agreement, including the

divestiture and the BAT share purchase, which closed on June 12, 2015;

· "Lorillard transferred assets" means certain assets that were owned by Lorillard subsidiaries immediately prior to the Lorillard
transactions, related to the electronic cigarette brands blu eCIGS and SKYCIG and the cigarette brand MAVERICK, as well as

Lorillard's owned and leased real property, including its manufacturing, research and development facilities and headquarters in
Greensboro, North Carolina and the tobacco receiving and storage facilities in Danville, Virginia, and certain transferred employees;

· "master settlement agreement" means the Master Settlement Agreement, dated as of November 23, 1998, among 46 U.S. states, the

District of Columbia and five U.S. territories and various tobacco manufacturers, including RJR Tobacco, B&W and Lorillard
Tobacco, resolving various state health-care cost recovery claims;

· "merger agreement" means the Agreement and Plan of Merger, dated as of July 15, 2014, among RAI, Lorillard and merger sub;

· "merger consideration" means the consideration, per share of Lorillard common stock, paid by RAI to the Lorillard shareholders in the

Lorillard merger, consisting of:

·
0.2909 of a fully paid and nonassessable share of RAI common stock (prior to giving effect to the two-for-one stock split of

RAI's common stock on August 31, 2015), plus

·
$50.50 in cash;

ii
Table of Contents
· "merger sub" means RAI's direct, wholly owned subsidiary, Lantern Acquisition Co., a Delaware corporation, that merged with and

into Lorillard pursuant to the Lorillard merger;

· "MSAi" means Management Science Associates, Inc.

· "Moody's" means Moody's Investors Service Inc., and any successor to its credit ratings business;

· "private exchange offers" means the prior exchange offers and consent solicitations commenced by RAI in a private offering exempt
from the registration and prospectus delivery requirements of the Securities Act on June 11, 2015 that expired on July 10, 2015. Upon

settlement of the exchange offers on July 15, 2015, RAI issued $3,122,670,000 aggregate principal amount of old notes in exchange for
Lorillard Tobacco notes;

· "proposed sale to JTIH" means the proposed sale of the international NAS business to JTIH pursuant to the Japan Tobacco purchase

agreement;

· "RAI indenture" means RAI's indenture dated May 31, 2006, as supplemented, pursuant to which the new notes offered hereby will be

issued, and pursuant to which RAI's existing notes, including the old notes, have been issued;

· "RAI transferred assets" means certain assets owned by RAI subsidiaries immediately prior to the Lorillard transactions related to the

cigarette brands WINSTON, KOOL and SALEM;

· "registration rights agreement" means the registration rights agreement, dated as of July 15, 2015, by and among RAI, certain of RAI's

subsidiaries that guarantee the old notes and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, who served as dealer
managers for the private exchange offers;

· "revolving credit facility" means the Credit Agreement, dated as of December 18, 2014, among RAI, JPMorgan Chase Bank, N.A., as
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
Administrative Agent, Citibank, N.A., as Syndication Agent, and the various Documentation Agents, Joint Lead Arrangers, Joint

Bookrunners and lending institutions party thereto, as amended, providing for a six-year, $2.0 billion unsecured senior revolving credit
facility;

· "RJR Tobacco" means RAI's indirect, wholly owned subsidiary, R. J. Reynolds Tobacco Company, a North Carolina corporation, or,

from time to time as the context requires, the RAI reportable operating segment that consists principally of the primary operations of R.
J. Reynolds Tobacco Company;

· "RJR" means RAI's direct, wholly owned subsidiary, R.J. Reynolds Tobacco Holdings, Inc., a Delaware corporation;

· "S&P" means Standard & Poor's Ratings Services, a division of Standard & Poor's Financial Services LLC, a subsidiary of The

McGraw-Hill Companies, Inc., and any successor to its credit ratings business;

· "Santa Fe" means the RAI reportable operating segment comprised of the domestic operations of SFNTC.

· "SFNTC" means Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation;

· "SEC" means the U.S. Securities and Exchange Commission;

· "Securities Act" means the U.S. Securities Act of 1933, as amended;

· "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended;

· "state settlement agreements" means (1) the master settlement agreement and (2) the other settlement agreements entered into prior to

the master settlement agreement between major U.S. cigarette manufacturers and the states of Mississippi, Florida, Texas and
Minnesota, resolving various state health-care cost recovery claims;

· "subscription agreement" means the subscription and support agreement, dated as of July 15, 2014, among BAT, RAI and B&W, as

amended;

iii
Table of Contents

· "transfer agreement" means the transfer agreement, dated as of July 15, 2014, between Lorillard and Imperial Sub, as amended;

· "transferred assets" means the RAI transferred assets and the Lorillard transferred assets; and

· "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
Other terms used herein and not included in the above glossary are defined elsewhere in this prospectus.

iv
Table of Contents
SUMMARY
The following summary may not contain all the information that may be important to you. You should read this entire prospectus and the
documents incorporated by reference into this prospectus before deciding to participate in any Exchange Offer.
Reynolds American Inc.
General
RAI is a North Carolina corporation and a holding company whose reportable operating segments include the primary operations of RJR
Tobacco, the second largest tobacco company in the United States; American Snuff, the second largest smokeless tobacco products
manufacturer in the United States; and Santa Fe, the manufacturer of the leading super-premium cigarette brand. R. J. Reynolds Vapor
Company, a manufacturer and marketer of digital vapor cigarettes in the United States, Niconovum AB and Niconovum USA, Inc., marketers
of nicotine replacement therapy products in Sweden and the United States, respectively, under the ZONNIC brand name, SFR Tobacco
International GmbH and various foreign affiliated subsidiaries, which distribute Santa Fe's NATURAL AMERICAN SPIRIT brand outside of
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
the United States, among other RAI subsidiaries, are included in the All Other segment. As described below, if the proposed sale to JTIH is
completed, the operations of Santa Fe's NATURAL AMERICAN SPIRIT brand outside of the United States will be sold to JTIH.
BAT, directly or indirectly through one or more of its subsidiaries or affiliates, owns approximately 42% of RAI's outstanding common
stock. RAI's principal executive offices are located at 401 North Main Street, Winston-Salem, North Carolina 27101, and its telephone
number is (336) 741-2000.
RJR Tobacco's brands include three of the best-selling cigarettes in the United States: NEWPORT, CAMEL and PALL MALL. These
brands, and its other brands, including DORAL, MISTY, and CAPRI, are manufactured in a variety of styles and marketed in the United
States. RJR Tobacco's portfolio also includes a smoke-free tobacco product, CAMEL Snus, which is heat-treated tobacco in individual
pouches that provide convenient tobacco consumption. RJR Tobacco manages contract manufacturing of cigarette and tobacco products
through arrangements with BAT affiliates, and manages the export of tobacco products to certain U.S. territories, U.S. duty-free shops and
U.S. overseas military bases. RJR Tobacco also manages the super-premium cigarette brands, DUNHILL and STATE EXPRESS 555, which
are licensed from BAT. RJR Tobacco had an approximate 26.5% share of the U.S. cigarette market in 2014 based on data collected by
IRI/Capstone and processed and managed by MSAi.
On August 31, 2015, RAI effected a two-for-one stock split of RAI's common stock, in the form of a special 100% stock dividend, for
shareholders of record of RAI on August 17, 2015. Except as otherwise noted, share numbers in this prospectus related to periods before the
stock split have been retrospectively adjusted to reflect the split.
The Lorillard Transactions
The Lorillard Merger
On June 12, 2015, pursuant to the merger agreement, RAI acquired Lorillard in the Lorillard merger, whereby merger sub merged with
and into Lorillard, with Lorillard surviving as a wholly owned subsidiary of RAI, for cash and stock consideration of approximately $25.8
billion.
Prior to the completion of the Lorillard merger, Lorillard, including its subsidiaries and affiliates, was the third largest manufacturer of
cigarettes in the United States. NEWPORT, Lorillard's flagship premium cigarette

1
Table of Contents
brand, was the top selling menthol and second largest selling cigarette brand overall in the United States based on domestic shipment volume
data from MSAi for 2014. The NEWPORT brand, which includes both menthol and non-menthol product offerings, accounted for
approximately 86.5% of Lorillard's consolidated net sales for the fiscal year ended December 31, 2014.
Upon completion of the Lorillard merger, each share of Lorillard common stock (other than treasury shares held by Lorillard and any
shares of Lorillard common stock owned by any Lorillard subsidiary, RAI or merger sub) was automatically converted into the right to receive
(1) 0.2909 of a fully paid and nonassessable share of RAI common stock (prior to giving effect to the two-for-one stock split of RAI's
common stock on August 31, 2015), plus (2) $50.50 in cash.
The Divestiture
In connection with entry into the merger agreement, on July 15, 2014, RAI entered into the asset purchase agreement and Lorillard
entered into the transfer agreement, in each case with Imperial Sub, and, for certain limited purposes of the asset purchase agreement,
Imperial, pursuant to which, in connection with the closing of the Lorillard merger, Imperial Sub acquired (1) the RAI transferred assets,
consisting of certain assets previously owned by RAI subsidiaries or affiliates, related to RJR Tobacco's former cigarette brands WINSTON,
KOOL and SALEM, and (2) the Lorillard transferred assets, consisting of certain assets previously owned by Lorillard subsidiaries or
affiliates, related to Lorillard's former electronic cigarette brands blu eCIGS and SKYCIG and its former cigarette brand MAVERICK, as well
as Lorillard's previously owned and leased real property, including its manufacturing, research and development facilities and headquarters in
Greensboro, North Carolina and tobacco receiving and storage facilities in Danville, Virginia, and certain transferred employees, together with
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
certain associated liabilities.
Pursuant to the transfer agreement, certain Lorillard transferred assets, including Lorillard's Greensboro facility, Lorillard's Danville
facility, collective bargaining agreements that Lorillard was a party to and the related pension plan and certain liabilities, were transferred by
Lorillard subsidiaries to Imperial Sub immediately prior to the closing of the Lorillard merger. The remaining transferred assets, including all
of the RAI transferred assets, and certain related assumed liabilities, were transferred to Imperial Sub by RAI subsidiaries or affiliates
immediately after the closing of the Lorillard merger. The proceeds from the divestiture, approximately $7.1 billion, were used to fund, in
part, the cash portion of the merger consideration and fees and expenses in connection with the transactions contemplated by the merger
agreement.
The BAT Share Purchase
In connection with the merger agreement and asset purchase agreement, BAT, RAI's largest shareholder, and RAI entered into the
subscription agreement on July 15, 2014, pursuant to which, prior to giving effect to the two-for-one stock split of RAI's common stock on
August 31, 2015, BAT, indirectly through its wholly owned subsidiary, Louisville Securities Limited, subscribed for and purchased
simultaneously with the closing of the Lorillard merger, approximately 77.7 million shares of RAI common stock for an aggregate purchase
price of approximately $4.7 billion, based on a price of $60.16 per share. As a result of the BAT share purchase, BAT and its subsidiaries
collectively maintained their approximately 42% ownership interest in RAI immediately following completion of the Lorillard merger. The
proceeds from the BAT share purchase were used to fund, in part, the cash portion of the Lorillard merger consideration and fees and expenses
in connection with the transactions contemplated by the merger agreement.
The Lorillard Tobacco Notes, the Lorillard Tobacco Merger and the Private Exchange Offers
Immediately prior to the Lorillard merger, Lorillard Tobacco had outstanding an aggregate of $3.5 billion in principal amount of the
Lorillard Tobacco notes, all of which were guaranteed by Lorillard. In connection with

2
Table of Contents
the Lorillard Tobacco merger--pursuant to which Lorillard Tobacco merged with and into RJR Tobacco, with RJR Tobacco surviving as a
direct, wholly owned subsidiary of RJR--RJR Tobacco assumed Lorillard Tobacco's obligations under the Lorillard Tobacco notes and the
Lorillard Tobacco indenture, and RJR assumed Lorillard's obligations as guarantor under the Lorillard Tobacco notes and the Lorillard
Tobacco indenture.
On June 11, 2015, RAI commenced (1) private offers to exchange any and all (to the extent held by eligible holders) of the Lorillard
Tobacco notes for the old notes having the same interest payment and maturity dates and interest rate provisions as the corresponding series of
Lorillard Tobacco notes, and (2) related consent solicitations of the eligible holders of each series of Lorillard Tobacco notes to amend the
Lorillard Tobacco indenture.
The private exchange offers expired on July 10, 2015. Eligible holders who validly tendered, and did not validly withdraw, their
Lorillard Tobacco notes in the private exchange offers (and thereby gave, and did not validly revoke, their consents to the indenture
amendments) received, upon settlement of the private exchange offers on July 15, 2015, old notes in the same principal amount as the
Lorillard Tobacco notes tendered therefor plus a consent payment of $2.50 per $1,000 principal amount of Lorillard Tobacco notes tendered.
Of the $3.5 billion aggregate principal amount of Lorillard Tobacco Notes previously outstanding, approximately $3.12 billion, or 89.2%, were
exchanged for old notes. RJR Tobacco remains the principal obligor of the approximately $377.3 million of Lorillard Tobacco notes that were
not tendered in the private exchange offers. Subsequent to the completion of the private exchange offers, RAI guaranteed RJR Tobacco's
obligations under such Lorillard Tobacco notes and the Lorillard Tobacco indenture, and currently RAI and RJR are the only guarantors of
such notes.
The old notes are the principal obligations of RAI and are guaranteed by the same guarantors as RAI's other outstanding senior notes and
the same guarantors of the revolving credit facility. The old notes were issued in a private offering exempt from, or not subject to, the
registration requirements of the federal securities laws.
In connection with the private exchange offers, RAI and certain guarantors of the old notes entered into a registration rights agreement
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
with the dealer managers for the private exchange offers, pursuant to which RAI and the guarantors agreed, among other things, to complete
an exchange offer registered under the Securities Act for the old notes within 210 days following their issuance. The offering of new notes
pursuant to this prospectus is being made in fulfillment of that agreement.
Proposed Sale to JTIH
On September 28, 2015, SFNTC, R. J. Reynolds Global Products, Inc., R. J. Reynolds Tobacco B.V., JTIH and, for certain provisions of
the agreement and as guarantors, Japan Tobacco and RAI, entered into the Japan Tobacco purchase agreement providing for the proposed sale
to JTIH, pursuant to which RAI agreed to sell to JTIH, subject to the terms and conditions therein, the operations of Santa Fe's NATURAL
AMERICAN SPIRIT brand outside of the United States, referred to as the international NAS business, for $5.0 billion in cash (subject to
customary adjustments for closing date levels of cash, debt and working capital). In connection with the proposed sale to JTIH, JTIH would
acquire (1) SFNTC's intellectual property relating to the international NAS business and (2) RAI subsidiaries in Belgium, France, Germany,
Italy, Japan, the Netherlands, Spain, Switzerland and the United Kingdom through which the international NAS business is conducted.
In the Japan Tobacco purchase agreement, RAI has agreed not to, and agreed to cause its controlled affiliates not to, engage in the
business of producing, selling, distributing and developing natural, organic and additive-free combustible tobacco cigarettes and roll-your-own
or make-your-own tobacco products outside of the United States, and Japan Tobacco has agreed not to compete with RAI's conduct of such
business in the United States, in each case, for five years following the closing of the proposed sale to JTIH.

3
Table of Contents
Pursuant to the Japan Tobacco purchase agreement, concurrently with the closing of the proposed sale to JTIH, certain of RAI's
subsidiaries party to the agreement and JTIH, and/or their respective affiliates, will enter into various ancillary agreements, including, among
others:

· a brand and product integrity agreement, in which SFNTC and JTIH will agree, for a limited period, to (1) certain restrictions on
use of the NATURAL AMERICAN SPIRIT brand and related trademarks; (2) quality standards for specified products sold under

the NATURAL AMERICAN SPIRIT brand; and (3) a process for collaboration to maintain and enhance the equity and goodwill of
the NATURAL AMERICAN SPIRIT brand;

· a leaf supply agreement, in which SFNTC will agree to supply JTIH with its requirements for specified tobacco leaf for a limited

period and on a non-exclusive basis;

· a contract manufacturing agreement, in which SFNTC will agree to manufacture specified products sold under the NATURAL

AMERICAN SPIRIT brand for JTIH;

· an intellectual property transfer and license agreement, which will provide for:

·
the sale to JTIH of all of SFNTC's rights to the non-U.S. trademarks and other intellectual property and goodwill associated

with the international NAS business;

·
the assignment of certain trademark and co-existence agreements to JTIH; and

·
the grant of licenses to JTIH to use other intellectual property relating to the international NAS business; and

· a transition services agreement, in which the parties will agree to provide each other with various services related to the

international NAS business for a limited period to facilitate an orderly transition of ownership of the assets and properties relating
to the international NAS business to JTIH.
The obligation of each party to consummate the proposed sale to JTIH is subject to customary closing conditions, including, among other
things, the absence of legal restraints in effect that would prohibit the proposed sale to JTIH and obtaining certain required antitrust approvals
related to the proposed sale to JTIH. The obligation of JTIH to consummate the proposed sale to JTIH is also subject to, among other things,
the non-occurrence of a material adverse effect relating to the international NAS business.
The Japan Tobacco purchase agreement contains certain termination rights for each of RAI and Japan Tobacco, including the right of
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5
either party to terminate the Japan Tobacco purchase agreement if:

· the proposed sale to JTIH has not been consummated by February 29, 2016, referred to as the end date, subject to an automatic

three-month extension if, on the end date, the proposed sale to JTIH has not yet been granted certain required antitrust approvals
(but all other closing conditions have been satisfied), or

· a final and nonappealable governmental order has been issued that prohibits the proposed sale to JTIH.
In addition, pursuant to the Japan Tobacco purchase agreement, RAI will be entitled to receive a termination fee of $175 million in the
event that the Japan Tobacco purchase agreement is terminated by either RAI or Japan Tobacco because:

· a governmental authority has issued a final and non-appealable order that prohibits the proposed sale to JTIH on antitrust grounds

or

· the end date (including any extension) has passed and,
in either case, the condition to closing that relates to obtaining the required antitrust approvals is the only condition to closing that has not
been satisfied or waived.

4
Table of Contents
Organizational Structure
The following is a summary organizational chart of RAI and its subsidiaries. Certain of RAI's domestic subsidiaries, including its
material domestic subsidiaries, guarantee the old notes and will guarantee the new notes offered hereby as shown in the chart below. Each
guarantor is wholly owned by its parent. The guarantors of the notes also guarantee RAI's obligations under its approximately $17.2 billion
aggregate outstanding principal amount of existing notes, including the approximately $3.12 billion aggregate outstanding principal amount of
old notes, and any RAI obligations under its $2.0 billion revolving credit facility.

http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

424B5

(1)
Also guarantor of the Lorillard Tobacco notes.
(2)
Also principal obligor with respect to the Lorillard Tobacco notes.

5
Table of Contents
The Exchange Offers

Background
On July 15, 2015, RAI issued approximately $3.12 billion aggregate principal amount
of old notes pursuant to the private exchange offers. In connection with the private
exchange offers, RAI and certain guarantors of the old notes entered into a registration
rights agreement with the dealer managers for the private exchange offers, pursuant to
which RAI and the guarantors agreed, among other things, to complete an exchange
offer registered under the Securities Act for the old notes within 210 days following
their issuance.

See "The Exchange Offers--Purpose and Effect of the Exchange Offers."
http://www.sec.gov/Archives/edgar/data/83612/000119312515380785/d73137d424b5.htm[11/18/2015 4:28:34 PM]

Document Outline

#1">
- #1">