By Aleesia Forni
Virginia Beach, Dec. 16 - Kroger Co. priced $2 billion of senior notes (Baa2/BBB/BBB) in four tranches on Monday, according to an informed source and an FWP filed with the Securities and Exchange Commission.
The deal included $500 million of three-year floating-rate notes priced at par to yield Libor plus 53 basis points.
There was also $300 million of 1.2% notes due 2016 priced with a spread of Treasuries plus 55 bps, or 99.937 to yield 1.223%.
A $500 million issue of 2.3% notes due 2019 was sold at 80 bps over Treasuries.
Pricing was at 99.852 to yield 2.331%.
Finally, $700 million of 3.3% seven-year notes sold at 99.755 to yield 3.339%, or Treasuries plus 110 bps.
All four tranches priced at the tight end of talk.
BofA Merrill Lynch, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc. and RBS Securities Inc. were the bookrunners.
Proceeds will be used to fund the merger of Kroger and Harris Teeter Supermarkets, Inc., as well as for general corporate purposes.
The Cincinnati-based grocery retailer was last in the U.S. bond market with $1 billion of senior notes priced in two tranches on July 18.
The sale included $600 million of 3.85% 10-year notes sold with a spread of Treasuries plus 132.5 basis points and $400 million of 5.15% 30-year bonds priced at 155 bps over Treasuries.
| Issuer: | Kroger Co.
|
| Issue: | Senior notes
|
| Amount: | $2 billion
|
| Joint bookrunners: | BofA Merrill Lynch, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc., RBS Securities Inc.
|
| Co-managers: | Fifth Third Securities, | Inc., BNY Mellon Capital Markets, LLC, Mitsubishi UFJ Securities (USA), | Inc., RBC Capital Markets, LLC, PNC Capital Markets LLC, CastleOak Securities, LP, Williams Capital Group LP
|
| Trade date: | Dec. 16
|
| Settlement date: | Dec. 23
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
| Fitch: BBB
|
|
|
| Floaters due 2016
|
| Amount: | $500 million
|
| Maturity: | Oct. 17, 2016
|
| Coupon: | Libor plus 53 bps
|
| Price: | Par
|
| Yield: | Libor plus 53 bps
|
|
|
| Notes due 2016
|
| Amount: | $300 million
|
| Maturity: | Oct. 17, 2016
|
| Coupon: | 1.2%
|
| Price: | 99.937
|
| Yield: | 1.223%
|
| Spread: | Treasuries plus 55 bps
|
| Price talk: | Treasuries plus 60 bps area, tightened from Treasuries plus 75 bps area
|
| Make-whole call: | Treasuries plus 8 bps
|
|
|
| Notes due 2019
|
| Amount: | $500 million
|
| Maturity: | Jan. 15, 2019
|
| Coupon: | 2.3%
|
| Price: | 99.852
|
| Yield: | 2.331%
|
| Spread: | Treasuries plus 80 bps
|
| Price talk: | Treasuries plus 85 bps, tightened from Treasuries plus 100 bps area
|
| Make-whole call: | Treasuries plus 12 bps until Dec. 15, 2018, then callable at par
|
|
|
| Notes due 2021
|
| Amount: | $700 million
|
| Maturity: | Jan. 15, 2021
|
| Coupon: | 3.3%
|
| Price: | 99.755
|
| Yield: | 3.339%
|
| Spread: | Treasuries plus 110 bps
|
| Price talk: | Treasuries plus 115 bps area, tightened from Treasuries plus 125 bps area
|
| Make-whole call: | Treasuries plus 16 bps prior to Dec. 15, 2020, then callable at par
|
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