Kellogg gives early results in tender for 6.6% notes due 2011, waives financing condition

By Jennifer Chiou

New York, Nov. 19 - Kellogg Co. announced the early results as well as the waiver of the financing condition for its cash tender offer for up to $500 million of its $1,428,000,000 of 6.6% notes due 2011.

As of the early tender deadline at 5 p.m. ET on Nov. 18, previously prolonged from Nov. 10, holders had tendered $481,726,000 of the notes.

The offer will expire at 5 p.m. ET on Dec. 3. It began on Oct. 28.

At the prior early deadline, holders had tendered $418,858,000 of the notes.

For each $1,000 principal amount, the company will calculate its payout using the yield to maturity of the 0.875% Treasury due March 31, 2011 plus a spread of 50 basis points to 80 bps.

Those who tendered prior to the early deadline will receive the early tender payment of $40.00 per $1,000 principal amount of notes.

Kellogg will also pay accrued interest.

Under the modified Dutch auction procedure, Kellogg said it will accept notes validly tendered in the order of highest to lowest spreads and will select as the clearing spread the highest spread that will allow it to purchase up to $500 million of the notes.

The company had intended to begin a public offering of unsecured senior debt securities in order to fund the tender offer.

Goldman, Sachs & Co. (800 828-3182 or call collect 212 902-5183) and Morgan Stanley & Co. Inc. (800 624-1808 or call collect 212 761-5384) are the dealer managers.

The information agent is Global Bondholder Services Corp. (866 795-2200 or call collect 212 430-3774).

The convenience food company is based in Battle Creek, Mich.

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