Published on 11/19/2019 in the Prospect News Investment Grade Daily.
New Issue: Estee Lauder prices $1.8 billion of senior notes in three tranches
By Cristal Cody
Tupelo, Miss., Nov. 19 – Estee Lauder Cos. Inc. priced $1.8 billion of senior notes (A1/A+) in three tranches on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.
A $500 million tranche of 2% five-year notes priced at 99.421 to yield 2.122%, or a spread of 50 basis points over Treasuries.
The company sold $650 million of 2.375% 10-year notes at a Treasuries plus 70 bps spread. The notes priced at 99.046 to yield 2.483%.
A $650 million tranche of 3.125% 30-year notes priced at 98.769 to yield 3.189% and a spread of 93 bps over Treasuries.
Estee Lauder priced the five- and 10-year notes on the tight side of talk and placed the 30-year tranche better than guidance.
BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC were the active bookrunners. BNP Paribas Securities Corp. and MUFG were passive bookrunners.
Proceeds will be used for general corporate purposes, including funding the company’s planned acquisition of Have & Be Co. Ltd. and refinancing its $500 million of 1.8% senior notes due Feb. 7, 2020.
New York-based Estee Lauder is a manufacturer and marketer of skin care, makeup, fragrance and hair care products.
| Issuer: | Estee Lauder Cos. Inc.
|
| Amount: | $1.8 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC (active), BNP Paribas Securities Corp. and MUFG (passive)
|
| Co-managers: | Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc., ICBC Standard Bank plc, RBC Capital Markets, LLC, SG Americas Securities, LLC, U.S. Bancorp Investments, Inc., BBVA Securities Inc., Loop Capital Markets LLC and Siebert Williams Shank & Co., LLC
|
| Trade date: | Nov. 19
|
| Settlement date: | Nov. 21
|
| Ratings: | Moody’s: A1
|
| S&P: A+
|
| Distribution: | SEC registered
|
|
|
| Five-year notes
|
| Amount: | $500 million
|
| Maturity: | Dec. 1, 2024
|
| Coupon: | 2%
|
| Price: | 99.421
|
| Yield: | 2.122%
|
| Spread: | Treasuries plus 50 bps
|
| Call features: | Make-whole call before Nov. 1, 2024 at Treasuries plus 10 bps; thereafter at par
|
| Price guidance: | Treasuries plus 55 bps area, plus or minus 5 bps; initial talk at Treasuries plus 70 bps-75 bps area
|
|
|
| 10-year notes
|
| Amount: | $650 million
|
| Maturity: | Dec. 1, 2029
|
| Coupon: | 2.375%
|
| Price: | 99.046
|
| Yield: | 2.483%
|
| Spread: | Treasuries plus 70 bps
|
| Call features: | Make-whole call before Sept. 1, 2029 at Treasuries plus 15 bps; thereafter at par
|
| Price guidance: | Treasuries plus 75 bps area, plus or minus 5 bps; initial talk at Treasuries plus 90 bps-95 bps area
|
|
|
| 30-year notes
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| Amount: | $650 million
|
| Maturity: | Dec. 1, 2049
|
| Coupon: | 3.125%
|
| Price: | 98.769
|
| Yield: | 3.189%
|
| Spread: | Treasuries plus 93 bps
|
| Call features: | Make-whole call before June 1, 2049 at Treasuries plus 15 bps; thereafter at par
|
| Price guidance: | Treasuries plus 100 bps area, plus or minus 5 bps; initial talk at Treasuries plus 115 bps area
|
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