Published on 2/25/2016 in the Prospect News Investment Grade Daily.
New Issue: Kellogg prices $1.4 billion of senior notes due 2026, 2046
By Aleesia Forni
New York, Feb. 25 – Kellogg Co. was in Thursday’s primary with a $1.4 billion offering of senior notes (Baa2/BBB/BBB) in two tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.
The Battle Creek, Mich.-based issuer sold $750 million of 3.25% 10-year notes with a spread of Treasuries plus 157 basis points, at the tight side of guidance set in the 160 bps area over Treasuries.
Initially, talk was in the 180 bps area over Treasuries.
Pricing was at 99.896 to yield 3.262%.
Also, $650 million 4.5% 30-year bonds sold at Treasuries plus 200 bps. The notes sold at 99.003 to yield 4.561%.
Guidance was in the Treasuries plus 205 bps area after having firmed from initial price thoughts in the Treasuries plus 220 bps area.
Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the bookrunners.
The maker of cereal and convenience foods will use the proceeds to fund a tender offer and to repay commercial paper borrowings.
| Issuer: | Kellogg Co.
|
| Issue: | Senior notes
|
| Amount: | $1.4 billion
|
| Bookrunners: | Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC
|
| Co-managers: | BBVA Securities Inc., BMO Capital Markets Corp., Drexel Hamilton, LLC, Fifth Third Securities, Inc., Mizuho Securities USA Inc., Samuel A. Ramirez & Co., Inc., Siebert Brandford Shank & Co., LLC, SunTrust Robinson Humphrey Inc., Williams Capital Group, LP, U.S. Bancorp Investments, Inc.
|
| Trade date: | Feb. 25
|
| Settlement date: | March 7
|
| Change-of-control put: | 101%
|
| Ratings: | Moody’s: Baa2
|
| Standard & Poor’s: BBB
|
| Fitch: BBB
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $750 million
|
| Maturity: | April 1, 2026
|
| Coupon: | 3.25%
|
| Price: | 99.896
|
| Yield: | 3.262%
|
| Spread: | Treasuries plus 157 bps
|
| Price guidance: | Treasuries plus 160 bps area (+/- 3 bps), tightened from Treasuries plus 180 bps area
|
| Make-whole call: | Treasuries plus 25 bps
|
|
|
| 30-year notes
|
| Amount: | $650 million
|
| Maturity: | April 1, 2046
|
| Coupon: | 4.5%
|
| Price: | 99.003
|
| Yield: | 4.561%
|
| Spread: | Treasuries plus 200 bps
|
| Price guidance: | Treasuries plus 205 bps area (+/- 5 bps), tightened from Treasuries plus 220 bps area
|
| Make-whole call: | Treasuries plus 30 bps
|
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