By Andrea Heisinger
New York, Feb. 11 - Kellogg Co. on Monday priced $650 million of senior notes (Baa1/BBB+/BBB+) in two tranches, according to a market source.
The size was initially talked at $750 million, a source said.
A $250 million tranche of two-year floating-rate notes was sold at par to yield Libor plus 23 basis points. Pricing was at the low end of talk in the Libor plus 25 bps area, plus or minus 2 bps, the source said.
The notes are non-callable.
There was also $400 million of 2.75% 10-year notes priced at 99.39 to yield 2.82% with a spread of Treasuries plus 87.5 bps. Pricing was at the tight end of talk in the 90 bps area, plus or minus 2.5 bps.
There is a change-of-control put at 101%.
Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.
Proceeds will be used for general corporate purposes, including, along with cash on hand, to repay $750 million of 4.25% senior notes due March 6, 2013.
Kellogg was last in the U.S. bond market with a $1.45 billion sale in three tranches on May 14, 2012. That offering included a 3.125% 10-year note sold at 145 bps over Treasuries.
The maker of cereal and convenience foods is based in Battle Creek, Mich.
| Issuer: | Kellogg Co.
|
| Issue: | Senior notes
|
| Amount: | $650 million
|
| Bookrunners: | Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Wells Fargo Securities LLC
|
| Co-managers: | Barclays, Citigroup Global Markets Inc., C.L. King & Associates Inc., Fifth Third Securities, Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Mizuho Securities USA Inc., PNC Capital Markets LLC, Rabo Securities USA, Inc., SunTrust Robinson Humphrey Inc., Williams Capital Group LP, U.S. Bancorp Investments Inc.
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 11
|
| Settlement date: | Feb. 14
|
| Ratings: | Moody's: Baa1
|
| Standard & Poor's: BBB+
|
| Fitch: BBB+
|
|
|
| Two-year floaters
|
| Amount: | $250 million
|
| Maturity: | Feb. 13, 2015
|
| Coupon: | Libor plus 23 bps
|
| Price: | Par
|
| Yield: | Libor plus 23 bps
|
| Call: | Non-callable
|
| Price talk: | Libor plus 25 bps area, plus or minus 2 bps
|
|
|
| 10-year notes
|
| Amount: | $400 million
|
| Maturity: | March 1, 2023
|
| Coupon: | 2.75%
|
| Price: | 99.39
|
| Yield: | 2.82%
|
| Spread: | Treasuries plus 87.5 bps
|
| Call: | Make-whole at Treasuries plus 15 bps
|
| Price talk: | 90 bps area, plus or minus 2.5 bps
|
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