Kellogg announces early tender results; lifts sub-cap for one series

By Susanna Moon

Chicago, March 10 - Kellogg Co. said it lifted the sub-cap for one series of notes in the tender offer for up to $700 million of three series of senior notes.

The company will now purchase any and all of its $400 million of 2.75% notes, up to $500 million of its $700 million outstanding 3.125% notes and up to $150 million, up from $100 million, of its $1 billion outstanding 4% senior notes due 2020, according to a company press release.

As of 5 p.m. ET on March 7, the early tender date, investors had tendered $189,091,000 of the 2.75% notes, $341,478,000 of the 3.125% notes and $407,258,000 of the 4% notes. The notes are listed in order of priority acceptance level.

Of the tendered amount, the company accepted for purchase all of the 2.75% notes and 3.125% notes and $149,998,000 of the 4% notes.

As previously announced, the company will pay a total purchase price for each $1,000 principal amount of $946.88 for the 2.75% notes, $988.00 for the 3.125% notes and $1,073.06 for the 4% notes.

The amounts include a $30.00 early tender premium for those who tender by the early tender date.

The company also will pay accrued interest up to but excluding the settlement date, which will be March 10 for early tendered notes and March 24 for remaining tenders.

Pricing was set using the bid-side price of a reference security at 2 p.m. ET on March 7. The company used the 2.75% U.S. Treasury note due Feb. 15, 2024 plus 65 basis points for the 2.75% notes, the 2.75% U.S. Treasury note due Feb. 15, 2024 plus 50 bps for the 3.125% notes and the 2% U.S. Treasury note due Nov. 30, 2020 plus 60 bps for the 4% notes.

The tender offer will end 11:59 p.m. ET on March 21. The offer began on Feb. 24.

Holders who tender their notes after the early tender date will receive the total purchase price less the early tender premium.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106 collect), J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811 collect) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760 collect) are the lead dealer managers. D.F. King & Co., Inc. (800 967-4617 or 212 269-5550 collect or email kellogg@dfking.com) is the information agent and tender agent.

Kellogg is a maker of cereal and convenience foods is based in Battle Creek, Mich.

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