Published on 10/15/2018 in the Prospect News Investment Grade Daily.
New Issue: FedEx prices $1.25 billion two-part offering of guaranteed notes
By Cristal Cody
Tupelo, Miss., Oct. 15 – FedEx Corp. sold $1.25 billion of senior notes (Baa2/BBB) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.
A $400 million tranche of 4.2% 10-year notes priced at 99.879 to yield 4.215%, or a spread of 105 basis points over Treasuries.
FedEx sold $850 million of 4.95% 30-year notes at 99.273 to yield 4.997%. The bonds priced with a Treasuries plus 165 bps spread.
BofA Merrill Lynch, Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc. and Mizuho Securities USA LLC were the bookrunners.
The notes are guaranteed by Federal Express Corp., FedEx Ground Package System, Inc., FedEx Freight Corp., FedEx Freight, Inc., FedEx Corporate Services, Inc., FedEx Office and Print Services, Inc., Federal Express Europe, Inc., Federal Express Holdings SA and Federal Express International, Inc.
Proceeds will be used to redeem the company’s $750 million of 8% notes due Jan. 15, 2019 with a make-whole premium and for general corporate purposes, including debt repayment.
FedEx is a Memphis, Tenn.-based package and freight transportation company.
| Issuer: | FedEx Corp.
|
| Guarantors: | Federal Express Corp., FedEx Ground Package System, Inc., FedEx Freight Corp., FedEx Freight, Inc., FedEx Corporate Services, Inc., FedEx Office and Print Services, Inc., Federal Express Europe, Inc., Federal Express Holdings SA and Federal Express International, Inc.
|
| Amount: | $1.25 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Merrill Lynch, Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc. and Mizuho Securities USA LLC
|
| Co-managers: | BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., ING Financial Markets LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Ramirez & Co., Inc., Regions Securities LLC Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC
|
| Trade date: | Oct. 15
|
| Settlement date: | Oct. 17
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $400 million
|
| Maturity: | Oct. 17, 2028
|
| Coupon: | 4.2%
|
| Price: | 99.879
|
| Yield: | 4.215%
|
| Spread: | Treasuries plus 105 bps
|
| Call features: | Make-whole call before July 17, 2028 at Treasuries plus 20 bps; thereafter at par
|
|
|
| 30-year notes
|
| Amount: | $850 million
|
| Maturity: | Oct. 17, 2048
|
| Coupon: | 4.95%
|
| Price: | 99.273
|
| Yield: | 4.997%
|
| Spread: | Treasuries plus 165 bps
|
| Call features: | Make-whole call before April 17, 2048 at Treasuries plus 25 bps; thereafter at par
|
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