Kroger plans to sell senior notes in 10-, 30-year tranches Thursday

By Andrea Heisinger

New York, July 18 - Kroger Co. is planning a sale of senior notes (Baa2/BBB/BBB) on Thursday in two tranches, according to a source close to the trade and a 424B5 filing with the Securities and Exchange Commission.

The offering is set to include maturities of 2023 with initial talk in the Treasuries plus 137.5 basis points area and bonds due 2043, talked in the Treasuries plus 160 bps area. Both have a margin of plus or minus 5 bps.

There is a make-whole call on the 10-year notes until three months prior to maturity and up to six months before maturity on the 30-year bonds.

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

BofA Merrill Lynch, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to repay commercial paper issued to fund repayment of long-term debt that matured in February and April and for general corporate purposes.

The Cincinnati-based grocery retailer was last in the U.S. bond market with a $850 million offering of notes in two parts on April 10, 2012. That sale included a 3.4% 10-year note priced at 150 bps over Treasuries and a 5% 30-year bond sold at Treasuries plus 190 bps.

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