By Andrea Heisinger
New York, April 10 - Kroger Co. sold an upsized $850 million of senior notes (Baa2/BBB/BBB) in two tranches on Tuesday, an informed source said.
The deal size was increased slightly from $800 million.
The $500 million of 3.4% 10-year notes were sold at 99.355 to yield 3.477% with a spread of Treasuries plus 150 basis points. The notes priced in line with guidance in the 150 bps area.
The tranche has a make-whole call of 25 bps over Treasuries until Jan. 15, 2022 and can be called at par after that date.
A $350 million tranche of 5% 30-year bonds priced at 99.661 to yield 5.022% with a spread of Treasuries plus 190 bps. The bonds were sold wider than talk in the 185 bps area.
The bonds have a make-whole call at 30 bps over Treasuries until Oct. 15, 2041 and have a par call after.
Both tranches feature a change-of-control put at 101%.
Active bookrunners were Citigroup Global Markets Inc., Goldman Sachs & Co. and RBS Securities Inc. Passive bookrunners were Bank of America Merrill Lynch, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC.
Senior co-managers were BNY Mellon Capital Markets LLC, Fifth Third Securities, Inc., PNC Capital Markets LLC and RBC Capital Markets LLC.
Co-managers were CastleOak Securities LP and Williams Capital Group LP.
Proceeds will be used to repay long-term debt, including 6.75% senior notes due April 15 and 6.2% notes due June 15, and for general corporate purposes.
Kroger was in the market with a $450 million deal of 2.2% five-year notes on Jan. 12.
The grocery retailer is based in Cincinnati.
| Issuer: | Kroger Co.
|
| Issue: | Senior notes
|
| Amount: | $850 million, increased from $800 million
|
| Bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co., RBS Securities Inc. (active), Bank of America Merrill Lynch, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC (passive)
|
| Senior co-managers: | BNY Mellon Capital Markets LLC, Fifth Third Securities, Inc., PNC Capital Markets LLC, RBC Capital Markets LLC
|
| Co-managers: | CastleOak Securities LP, Williams Capital Group LP
|
| Change-of-control put: | 101%
|
| Trade date: | April 10
|
| Settlement date: | April 16
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
| Fitch: BBB
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Maturity: | April 15, 2022
|
| Coupon: | 3.4%
|
| Price: | 99.355
|
| Yield: | 3.477%
|
| Spread: | Treasuries plus 150 bps
|
| Call: | Make-whole at Treasuries plus 25 bps until Jan. 15, 2022, par call after
|
| Price talk: | 150 bps area
|
|
|
| 30-year bonds
|
| Amount: | $350 million
|
| Maturity: | April 15, 2042
|
| Coupon: | 5%
|
| Price: | 99.661
|
| Yield: | 5.022%
|
| Spread: | Treasuries plus 190 bps
|
| Call: | Make-whole at Treasuries plus 30 bps until Oct. 15, 2041, par call after
|
| Price talk: | 185 bps area
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
