By Andrea Heisinger
New York, Feb. 4 - Kraft Foods Inc. priced $9.5 billion of senior unsecured notes (Baa2/BBB-/BBB-) late Thursday afternoon in four tranches after the sale went overnight, according to an informed source and an FWP filing with the Securities and Exchange Commission.
The offering was launched in the morning but then re-launched in the afternoon as pricing was tweaked.
A $1 billion tranche of 2.625% notes due in March 2013 priced at 99.731 to yield 2.71%, or Treasuries plus 140 basis points. The tranche was talked in the 150 bps area initially and then at 137.5 bps early on Wednesday. The notes priced slightly wider.
A $1.75 billion tranche of 4.125% six-year notes priced at 99.658 to yield 4.19%, or 190 bps over Treasuries.
The $3.75 billion of 5.375% 10-year notes priced at 99.176 to yield 5.483%, or Treasuries plus 190 bps.
Guidance for both the six-year and 10-year tranches was initially in the 187.5 bps area. This was later revised to 185 bps over Treasuries, with the tranches pricing at the wide end of both.
The final tranche of $3 billion in 6.5% 30-year bonds sold at 99.036 to yield 6.574% and have a spread of Treasuries plus 205 bps. These notes were originally talked at 15 bps over the 10-year tranche's spread, or 200 bps, and priced wider than that level.
The notes feature a change-of-control put of 101%. Make-whole call information was not available at press time.
The sale was initially expected to price late on Wednesday but was held overnight due to the size and number of bookrunners involved, the source said. The total issuance was thought to be "a minimum of $4 billion," a source said at the end of Wednesday, with each tranche at $1 billion or more. 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, RBS Securities Inc. and SG Americas Securities LLC ran the books.
Senior co-managers were Banca Imi, DnB NOR Markets, Mizuho Securities USA Inc. and Santander Securities.
Co-managers were Blaylock Robert Van LLC, Cabrera Capital Markets LLC, CastleOak Securities LP and Lazard Investments.
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.
| Issuer: | Kraft Foods Inc.
|
| Issue: | Senior unsecured notes
|
| Amount: | $9.5 billion
|
| Bookrunners: | BBVA Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities, Deutsche Bank Securities Inc., HSBC Securities, RBS Securities Inc., SG Americas Securities LLC
|
| Senior co-managers: | Banca Imi, DnB NOR Markets, Mizuho Securities USA Inc., Santander Securities
|
| Co-managers: | Blaylock Robert Van LLC, Cabrera Capital Markets LLC, CastleOak Securities LP, Lazard Investments
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 4
|
| Settlement date: | Feb. 8
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB-
|
| Fitch: BBB-
|
|
|
| Notes due 2013
|
| Amount: | $1 billion
|
| Maturity: | March 8, 2013
|
| Coupon: | 2.625%
|
| Price: | 99.731
|
| Yield: | 2.71%
|
| Spread: | Treasuries plus 140 bps
|
| Price talk: | 150 bps area, then 137.5 bps
|
|
|
| Six-year notes
|
| Amount: | $1.75 billion
|
| Maturity: | Feb. 9, 2016
|
| Coupon: | 4.125%
|
| Price: | 99.658
|
| Yield: | 4.19%
|
| Spread: | Treasuries plus 190 bps
|
| Price talk: | 187.5 bps area, then 185 bps
|
|
|
| 10-year notes
|
| Amount: | $3.75 billion
|
| Maturity: | Feb. 10, 2020
|
| Coupon: | 5.375%
|
| Price: | 99.176
|
| Yield: | 5.483%
|
| Spread: | Treasuries plus 190 bps
|
| Price talk: | 187.5 bps area, then 185 bps
|
|
|
| 30-year bonds
|
| Amount: | $3 billion
|
| Maturity: | Feb. 9, 2040
|
| Coupon: | 6.5%
|
| Price: | 99.036
|
| Yield: | 6.574%
|
| Spread: | Treasuries plus 205 bps
|
| Price talk: | 15 bps over 10-year spread
|
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