By Devika Patel
Knoxville, Tenn., Sept. 23 – British American Tobacco plc subsidiaries offered further details, including the price, about a $6.25 billion sale of registered guaranteed senior notes (Baa2/BBB+) that priced in five tranches on Tuesday, according to an FWP filed with the Securities and Exchange Commission.
B.A.T. International Finance plc sold $1.5 billion of 1.668% notes due March 25, 2026 at a spread of Treasuries plus 140 basis points. These notes priced at par.
The notes were initially talked to price in the Treasuries plus 170 bps area.
In the remaining issues, B.A.T. Capital Corp. priced $1.75 billion of 2.259% notes due March 25, 2028 at 180 bps over Treasuries. These notes priced at par.
The offering was guided to price with a Treasuries plus 210 bps area spread.
B.A.T. Capital sold $1.25 billion of 2.726% notes due March 25, 2031 at a spread of Treasuries plus 205 bps. These notes priced at par.
Initial price talk was at the 230 bps spread area.
A $750 million offering of 3.734% notes due Sept. 25, 2040 was sold with a Treasuries plus 230 bps spread. These notes priced at par.
Price guidance was at the 270 bps over Treasuries area.
In the final tranche, B.A.T. Capital sold $1 billion of 3.984% notes due Sept. 25, 2050 at a 255 bps over Treasuries spread. These notes priced at par.
The notes were talked to print at the 290 bps spread area.
BofA Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, NatWest Markets Securities Inc., SG Americas Securities LLC and Wells Fargo Securities LLC were the active bookrunners. BBVA Securities Inc., HSBC Securities (USA) Inc. and Santander Investment Securities Inc. were passive.
The notes from B.A.T. International will be guaranteed by British American Tobacco plc, B.A.T. Capital Corp., B.A.T. Netherlands Finance BV and Reynolds American Inc.
The notes from B.A.T. Capital will be guaranteed by British American Tobacco, B.A.T. International Finance, B.A.T. Netherlands Finance and Reynolds American.
Proceeds will be used for general corporate purposes, including debt refinancing.
British American Tobacco on Tuesday announced that B.A.T. International Finance, B.A.T. Capital Corp. and Reynolds America Inc. have started tender offers for up to $2 billion in cash for certain outstanding dollar-, euro- and sterling-denominated bonds.
British American Tobacco is a London-based international tobacco company.
| Issuers: | B.A.T. International Finance plc and B.A.T. Capital Corp.
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| Amount: | $6.25 billion
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| Description: | Senior notes
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| Bookrunners: | BofA Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, NatWest Markets Securities Inc., SG Americas Securities LLC and Wells Fargo Securities LLC (active); BBVA Securities Inc., HSBC Securities (USA) Inc. and Santander Investment Securities Inc. (passive)
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| Co-managers: | Bank of China Ltd., London Branch, Intesa Sanpaolo SpA, Lloyds Securities Inc. and SMBC Nikko Securities America Inc.
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| Trade date: | Sept. 22
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| Settlement date: | Sept. 25
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| Ratings: | Moody’s: Baa2
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| S&P: BBB+
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| Distribution: | SEC registered
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| Notes due 2026
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| Issuer: | B.A.T. International Finance plc
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| Guarantors: | British American Tobacco plc, B.A.T. Capital Corp., B.A.T. Netherlands Finance BV and Reynolds American Inc.
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| Amount: | $1.5 billion
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| Maturity: | March 25, 2026
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| Coupon: | 1.668%
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| Price: | Par
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| Yield: | 1.668%
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| Spread: | Treasuries plus 140 bps
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| Call: | Make-whole call at Treasuries plus 25 bps until Feb. 25, 2026, then a par call
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| Price guidance: | Treasuries plus 170 bps area
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| Notes due 2028
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| Issuer: | B.A.T. Capital Corp.
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| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
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| Amount: | $1.75 billion
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| Maturity: | March 25, 2028
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| Coupon: | 2.259%
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| Price: | Par
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| Yield: | 2.259%
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| Spread: | Treasuries plus 180 bps
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| Call: | Make-whole call at Treasuries plus 30 bps until Jan. 25, 2028, then a par call
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| Price guidance: | Treasuries plus 210 bps area
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| Notes due 2031
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| Issuer: | B.A.T. Capital Corp.
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| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
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| Amount: | $1.25 billion
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| Maturity: | March 25, 2031
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| Coupon: | 2.726%
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| Price: | Par
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| Yield: | 2.726%
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| Spread: | Treasuries plus 205 bps
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| Call: | Make-whole call at Treasuries plus 35 bps until Dec. 25, 2030, then a par call
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| Price guidance: | Treasuries plus 230 bps area
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| 20-year notes
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| Issuer: | B.A.T. Capital Corp.
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| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
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| Amount: | $750 million
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| Maturity: | Sept. 25, 2040
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| Coupon: | 3.734%
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| Price: | Par
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| Yield: | 3.734%
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| Spread: | Treasuries plus 230 bps
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| Call: | Make-whole call at Treasuries plus 35 bps until March 25, 2040, then a par call
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| Price guidance: | Treasuries plus 270 bps area
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|
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| 30-year notes
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| Issuer: | B.A.T. Capital Corp.
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| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
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| Amount: | $1 billion
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| Maturity: | Sept. 25, 2050
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| Coupon: | 3.984%
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| Price: | Par
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| Yield: | 3.984%
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| Spread: | Treasuries plus 255 bps
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| Call: | Make-whole call at Treasuries plus 40 bps until March 25, 2050, then a par call
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| Price guidance: | Treasuries plus 290 bps area
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