By Andrea Heisinger
New York, May 14 - Kellogg Co. sold $1.45 billion of senior notes (Baa1/BBB+/BBB+) in three parts on Monday, an informed source said.
The $350 million of 1.125% three-year paper priced at 99.883 to yield 1.165% with a spread of Treasuries plus 80 basis points. The notes priced tighter than guidance of 25 bps less than the five-year note spread.
The tranche had a make-whole call at 15 bps over Treasuries.
A second part was $400 million of 1.75% five-year notes sold at 99.458 to yield 1.864% with a spread of 115 bps over Treasuries. The notes were priced tighter than talk of 25 bps less than the 10-year note spread.
There is a make-whole call at 20 bps over Treasuries.
Finally, there was $700 million of 3.125% 10-year notes priced at 99.159 to yield 3.224% with a spread of 145 bps over Treasuries. The paper was priced in line with talk in the mid-100 bps area.
The 10-year notes have a make-whole call at 25 bps over Treasuries.
The notes feature a change-of-control put at 101%.
Barclays Capital Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the active bookrunners. Passive bookrunners were Citigroup Global Markets Inc. and U.S. Bancorp Investments Inc.
Co-managers were Rabo Securities USA, Inc., Deutsche Bank Securities Inc., Mitsubishi UFJ Securities (USA) Inc., Goldman Sachs & Co., Mizuho Securities USA Inc. and SunTrust Robinson Humphrey Inc.
Proceeds are being used for general corporate purposes, including financing a portion of the $2.7 billion Pringles acquisition from Procter & Gamble, along with related fees and expenses.
There's a mandatory call at 101% if the acquisition's not done by Dec. 31.
Kellogg was last in the market with a $500 million deal of 1.875% five-year notes priced at 100 bps over Treasuries on Nov. 14, 2011.
The cereal and food products company is based in Battle Creek, Mich.
| Issuer: | Kellogg Co.
|
| Issue: | Senior notes
|
| Amount: | $1.45 billion
|
| Bookrunners: | Barclays Capital Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC (active), Citigroup Global Markets Inc., U.S. Bancorp Investments Inc. (passive)
|
| Co-managers: | Rabo Securities USA, Inc., Deutsche Bank Securities Inc., Mitsubishi UFJ Securities (USA) Inc., Goldman Sachs & Co., Mizuho Securities USA Inc., SunTrust Robinson Humphrey Inc.
|
| Change-of-control put: | 101%
|
| Mandatory call: | At 101% if Pringles acquisition not done by Dec. 31
|
| Trade date: | May 14
|
| Settlement date: | May 17
|
| Ratings: | Moody's: Baa1
|
| Standard & Poor's: BBB+
|
| Fitch: BBB+
|
|
|
| Three-year notes
|
| Amount: | $350 million
|
| Maturity: | May 15, 2015
|
| Coupon: | 1.125%
|
| Price: | 99.883
|
| Yield: | 1.165%
|
| Spread: | Treasuries plus 80 bps
|
| Call: | Make-whole at Treasuries plus 15 bps
|
| Price talk: | 25 bps less than five-year note spread
|
|
|
| Five-year notes
|
| Amount: | $400 million
|
| Maturity: | May 17, 2017
|
| Coupon: | 1.75%
|
| Price: | 99.458
|
| Yield: | 1.864%
|
| Spread: | Treasuries plus 115 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 25 bps less than 10-year note spread
|
|
|
| 10-year notes
|
| Amount: | $700 million
|
| Maturity: | May 17, 2022
|
| Coupon: | 3.125%
|
| Price: | 99.159
|
| Yield: | 3.224%
|
| Spread: | Treasuries plus 145 bps
|
| Call: | Make-whole at Treasuries plus 25 bps
|
| Price talk: | Mid-100 bps area
|
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