Kellogg launches cash tender offers for notes from five series

By Marisa Wong

Los Angeles, July 24 – Kellogg Co. said it has begun offers to purchase for cash any and all of its 4.15% senior notes due 2019 and up to $500 million combined aggregate principal amount of notes from four series.

Kellogg is offering to purchase notes from the following series under the maximum tender offer, listed in order of acceptance priority:

• $850 million outstanding 4% senior notes due 2020, up to a sublimit of $175 million aggregate principal amount, with pricing based on the 1.625% U.S. Treasury due June 30, 2021 and a fixed spread of 35 basis points;

• $400 million outstanding 3.25% senior notes due 2021, up to a sublimit of $175 million aggregate principal amount, with pricing based on the 1.625% U.S. Treasury due June 30, 2021 and a fixed spread of 25 bps;

• $600 million outstanding 2.65% senior notes due 2023, up to a sublimit of $75 million aggregate principal amount, with pricing based on the 1.75% U.S. Treasury due June 30, 2024 and a fixed spread of 45 bps; and

• $600 million outstanding 3.4% senior notes due 2027, up to a sublimit of $75 million aggregate principal amount, with pricing based on the 2.375% U.S. Treasury due May 15, 2029 and a fixed spread of 95 bps.

Pricing for the 2019 notes will be based on the 3.375% U.S. Treasury due Nov. 15, 2019 and a fixed spread of 15 bps.

The total considerations will be set at 11 a.m. ET on Aug. 7.

The offers will expire at 11:59 p.m. ET on Aug. 20.

Holders who tender their notes at or prior to 5 p.m. ET on Aug. 6, the early tender date, will be eligible to receive the total consideration, which includes an early tender premium of $30 per $1,000 principal amount of notes tendered by the early tender date.

Holders tendering after the early deadline will only receive the tender consideration, which is equal to the applicable total consideration less the early tender premium.

The company will also pay accrued and unpaid interest from and including the last interest payment date up to but excluding the applicable settlement date, which is expected to be Aug. 9 for early tenders and Aug. 22 for any final tenders.

Subject to the series tender caps and the overall tender cap, all notes tendered under the maximum tender offer on or before the early tender date having a higher acceptance priority level will be accepted before any tendered notes having a lower acceptance priority level are accepted in the offers; and all notes tendered under the maximum tender offer after the early tender date having a higher acceptance priority level will be accepted before any notes tendered under the maximum tender offer after the early tender date having a lower acceptance priority level are accepted in the offers.

However, even if the offers are not fully subscribed under the maximum tender offer as of the early tender date, notes tendered on or before the early tender date will be accepted for purchase in priority to other notes tendered after the early deadline even if those notes tendered later have a higher acceptance priority level than before the early deadline.

Notes under the maximum offer are subject to proration. In addition, if the maximum offers are fully subscribed by the early tender date, holders who tender notes after the early tender date will not have any of their notes accepted for payment.

Tenders may be withdrawn at any time at or prior to 5 p.m. ET on Aug. 6.

The tender offers are conditioned on completion of Ferrero International SA’s acquisition of certain of Kellogg’s businesses.

Kellogg said it reserves the right to waive any and all conditions to the offers, extend, terminate or withdraw the offers and increase or decrease the tender caps.

BofA Securities Inc. (980 387-3907 or 888 292-0070), Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745) and J.P. Morgan Securities LLC (212 834-8553 or 866 834-4666) are acting as lead dealer managers for the offers.

The information and tender agent is D.F. King & Co., Inc. (800 499-8159 or 212 269-5550 or e-mail kelloggs@dfking.com).

Kellogg is a food manufacturing company based in Battle Creek, Mich.

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