By Andrea Heisinger
New York, Oct. 18 - CSX Corp. priced $800 million of senior unsecured bonds (Baa3/BBB-/BBB-) in two parts on Monday, a source away from the deal said.
The $500 million tranche of 3.7% 10-year notes priced at 99.949 to yield 3.706% with a spread of Treasuries plus 120 basis points. They have a make-whole redemption at 20 bps over Treasuries until three months prior to maturity, then at par.
A second part was $300 million of 5.5% bonds due in 2041 that priced at 98.951 to yield 5.572% with a spread of 162.5 bps over Treasuries. The notes are callable at a make-whole amount of Treasuries plus 25 bps until six months before maturity, then at par.
J.P. Morgan Securities LLC and Morgan Stanley & Co. Inc. were the bookrunners. The co-lead manager was Credit Suisse Securities (USA) LLC.
The senior co-managers were Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and UBS Securities LLC. The co-managers were Mitsubishi UFJ Securities, Mizuho Securities USA Inc. and Scotia Capital (USA) Inc.
Proceeds are going toward general corporate purposes, including debt repayment, the repurchase of common stock, capital expenditures, working capital, productivity improvements and other cost reductions at CSX's major transportation units.
CSX last sold bonds in a $500 million deal of 7.375% 10-year notes on Jan. 14, 2009. They priced at 525 bps over Treasuries, or more than four times the spread of the new 10-year notes. Its last 30-year bonds were priced on March 24, 2008 at 310 bps over Treasuries.
The transportation supplier is based in Jacksonville, Fla.
| Issuer: | CSX Corp.
|
| Issue: | Senior unsecured notes
|
| Amount: | $800 million
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc.
|
| Co-lead manager: | Credit Suisse Securities (USA) LLC
|
| Senior co-managers: | Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., UBS Securities LLC
|
| Co-managers: | Mitsubishi UFJ Securities, Mizuho Securities USA Inc., Scotia Capital (USA) Inc.
|
| Trade date: | Oct. 18
|
| Settlement date: | Oct. 21
|
| Ratings: | Moody's: Baa3
|
| Standard & Poor's: BBB-
|
| Fitch: BBB-
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Maturity: | Oct. 30, 2020
|
| Coupon: | 3.7%
|
| Price: | 99.949
|
| Yield: | 3.706%
|
| Spread: | Treasuries plus 120 bps
|
| Call option: | Make-whole at Treasuries plus 20 bps until three months prior to maturity, then at par
|
|
|
| Notes due 2041
|
| Amount: | $300 million
|
| Maturity: | April 15, 2041
|
| Coupon: | 5.5%
|
| Price: | 98.951
|
| Yield: | 5.572%
|
| Spread: | Treasuries plus 162.5 bps
|
| Call option: | Make-whole at Treasuries plus 25 bps until six months prior to maturity, then at par
|
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