By Andrea Heisinger
New York, May 30 - Kraft Foods Group Inc. priced $6 billion of notes (Baa2/BBB/BBB-) in four parts on Wednesday as it prepares to spin off its grocery business, an informed source said.
Price talk came down about 15 bps across the board from initial whispers, a market source said. The size of the trade was initially talked at $4 billion but grew as investors took notice.
The $1 billion of 1.625% three-year notes sold at 99.741 to yield 1.714% with a spread of Treasuries plus 135 basis points. The notes came at the low end of guidance in the 140 bps area.
A second tranche of $1 billion in 2.25% five-year paper priced at 99.817 to yield 2.289% with a spread of 160 bps over Treasuries. The spread was at the tight end of talk in the 165 bps area.
The $2 billion of 3.5% 10-year notes sold at 99.1 to yield 3.608% with a spread of Treasuries plus 200 bps. These notes were sold at the low end of guidance in the 205 bps area.
There was also $2 billion of 5% 30-year bonds priced at 99.293 to yield 5.046% with a spread of Treasuries plus 235 bps. The bonds were also priced at the tight end of talk in the 240 bps area.
All of the tranches had a plus or minus 5 bps provision on price talk.
Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and RBS Securities Inc. were the bookrunners.
The sale was done under Rule 144A and Regulation S.
Kraft was last in the market with an $800 million sale of 18-month floating-rate notes on Jan. 5. Prior to that, Kraft priced a $9.5 billion deal in four parts on Feb. 4, 2010.
The food products and beverage manufacturer is based in Northfield, Ill.
| Issuer: | Kraft Foods Group Inc.
|
| Issue: | Notes
|
| Amount: | $6 billion
|
| Bookrunners: | Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, RBS Securities Inc.
|
| Distribution: | Rule 144A, Regulation S
|
| Trade date: | May 30
|
| Settlement date: | June 4
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
| Fitch: BBB-
|
|
|
| Three-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 4, 2015
|
| Coupon: | 1.625%
|
| Price: | 99.741
|
| Yield: | 1.714%
|
| Spread: | Treasuries plus 135 bps
|
| Price talk: | 140 bps area
|
|
|
| Five-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 5, 2017
|
| Coupon: | 2.25%
|
| Price: | 99.817
|
| Yield: | 2.289%
|
| Spread: | Treasuries plus 160 bps
|
| Price talk: | 165 bps area
|
|
|
| 10-year notes
|
| Amount: | $2 billion
|
| Maturity: | June 6, 2022
|
| Coupon: | 3.5%
|
| Price: | 99.1
|
| Yield: | 3.608%
|
| Spread: | Treasuries plus 200 bps
|
| Price talk: | 205 bps area
|
|
|
| 30-year bonds
|
| Amount: | $2 billion
|
| Maturity: | June 4, 2042
|
| Coupon: | 5%
|
| Price: | 99.293
|
| Yield: | 5.046%
|
| Spread: | Treasuries plus 235 bps
|
| Price talk: | 240 bps area
|
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