Kraft Foods plans four-tranche note sale for Thursday; minimum of $4 billion expected

By Andrea Heisinger

New York, Feb. 3 - Kraft Foods Inc. is expected to price "a minimum of $4 billion" in senior unsecured notes in four tranches on Thursday, a market source said.

The notes (Baa2/BBB/BBB-) are in tranches due in 2013, 2016, 2020 and 2040. Each of the tranches is expected to be at least $1 billion, the source said.

Price talk for the tranche due in 2013 is in the 150 basis points area. Both the six-year notes and the 10-year notes are being talked at the 187.5 bps area. A tranche of 30-year bonds has guidance of 15 bps more than the 10-year tranche.

The notes feature a change-of-control put of 101%.

The note offering was initially expected to price late on Wednesday but was held overnight due to the size and number of bookrunners involved, the source said. There was about $20 billion on the books at the end of the day, he added.

BBVA Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBS Securities Inc. and Societe Generale are bookrunners.

Proceeds are being used to finance the acquisition of Cadbury plc and for general corporate purposes.

The confection, food and beverage company is based in Northfield, Ill.

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