By Andrea Heisinger
New York, Nov. 5 - Altria Group, Inc. priced an upsized $6 billion offering of senior unsecured notes (Baa1/BBB/BBB+) in three tranches late Wednesday, an informed source said.
The $1.4 billion of 8.5% five-year notes priced at 99.952 to yield 8.512%, equivalent to Treasuries plus 600 basis points.
The $3.1 billion of 9.7% 10-year notes priced at 99.931 to yield 9.711%, or Treasuries plus 600 bps.
The $1.5 billion of 9.95% 30-year notes priced at 99.709 to yield 10.196%, or Treasuries plus 600 bps.
All of the notes priced in line with guidance, which was in the 600 bps area, a source said.
The size of the issue was increased to add the 30-year notes.
The notes feature a change-of-control put of 101%. The notes are guaranteed by Philip Morris USA Inc.
Bookrunners were Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities Inc.
Proceeds will be used to fund a portion of the consideration in connection with the proposed acquisition of smokeless tobacco and wine company UST Inc. If not used for this purposes, proceeds will go to general corporate purposes.
The cigarette and tobacco holding company is based in Richmond, Va.
| Issuer: | Altria Group, Inc.
|
| Guarantor: | Philip Morris USA Inc.
|
| Issue: | Senior unsecured notes
|
| Total amount: | $6 billion
|
| Bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities Inc.
|
| Change-of-control put: | 101%
|
| Trade date: | Nov. 5
|
| Settlement date: | Nov. 10
|
| Ratings: | Moody's: Baa1
|
| Standard & Poor's: BBB
|
| Fitch: BBB+
|
|
|
| Five-year notes
|
| Amount: | $1.4 billion
|
| Maturity: | Nov. 10, 2013
|
| Coupon: | 8.5%
|
| Price: | 99.952
|
| Yield: | 8.512%
|
| Spread: | Treasuries plus 600 bps
|
| Price talk: | 600 bps area
|
|
|
| 10-year notes
|
| Amount: | $3.1 billion
|
| Maturity: | Nov. 10, 2018
|
| Coupon: | 9.7%
|
| Price: | 99.931
|
| Yield: | 9.711%
|
| Spread: | Treasuries plus 600 bps
|
| Price talk: | 600 bps area
|
|
|
| 30-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | Nov. 10, 2038
|
| Coupon: | 9.95%
|
| Price: | 99.709
|
| Yield: | 10.196%
|
| Spread: | Treasuries plus 600 bps
|
| Price talk: | 600 bps area
|
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