By Aleesia Forni
New York, Jan. 8 – Kroger Co. sold a $1.1 billion offering of senior notes (Baa2/BBB/BBB) in tranches due 2019, 2021 and 2026 on Friday, according to a market source and an FWP filed with the Securities and Exchange Commission.
The company sold $300 million of 2% three-year notes at 99.884 to yield 2.04%. The notes sold at Treasuries plus 85 basis points.
Price guidance was set in the Treasuries plus 90 bps area, tightened from talk in the Treasuries plus 105 bps area.
A $300 million tranche of 2.6% five-year notes priced with a 105 bps spread over Treasuries. The issue priced at 99.868 to yield 2.628%.
The notes sold at the tightest side of guidance set in the Treasuries plus 110 bps area. Initially, talk was in the Treasuries plus 125 bps area.
Finally, $500 million of 3.5% 10-year notes priced at 99.763 to yield 3.528%, or Treasuries plus 140 bps.
The issue came at the tight end of the Treasuries plus 145 bps area guidance, which had firmed from initial talk in the Treasuries plus 160 bps area.
BofA Merrill Lynch, Mizuho Securities, U.S. Bancorp Investments Inc., Citigroup Global Markets Inc. and RBC Capital Markets LLC are the bookrunners for all three tranches.
BNY Mellon Capital Markets LLC is also a bookrunner on the tranche due 2026.
Proceeds will be used to repay commercial paper and for general corporate purposes.
Kroger is a Cincinnati-based grocery retailer.
| Issuer: | Kroger Co.
|
| Issue: | Senior notes
|
| Amount: | $1.1 billion
|
| Bookrunners: | BofA Merrill Lynch, Mizuho Securities, U.S. Bancorp Investments Inc., Citigroup Global Markets Inc., RBC Capital Markets LLC
|
| Trade date: | Jan. 8
|
| Settlement date: | Jan. 15
|
| Ratings: | Moody’s: Baa2
|
| Standard & Poor’s: BBB
|
| Fitch: BBB
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $300 million
|
| Maturity: | Jan. 15, 2019
|
| Coupon: | 2%
|
| Price: | 99.884
|
| Yield: | 2.04%
|
| Spread: | Treasuries plus 85 bps
|
| Price guidance: | Treasuries plus 90 bps area, tightened from Treasuries plus 105 bps area
|
| Make-whole call: | Treasuries plus 15 bps
|
|
|
| Five-year notes
|
| Amount: | $300 million
|
| Maturity: | Feb. 1, 2021
|
| Coupon: | 2.6%
|
| Price: | 99.868
|
| Yield: | 2.628%
|
| Spread: | Treasuries plus 105 bps
|
| Price guidance: | Treasuries plus 110 bps area, tightened from Treasuries plus 125 bps area
|
| Make-whole call: | Treasuries plus 20 bps prior to Jan. 1, 2021, then callable at par
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Additional bookrunner: | BNY Mellon Capital Markets LLC
|
| Maturity: | Feb. 1, 2026
|
| Coupon: | 3.5%
|
| Price: | 99.763
|
| Yield: | 3.528%
|
| Spread: | Treasuries plus 140 bps
|
| Price guidance: | Treasuries plus 145 bps area, tightened from Treasuries plus 160 bps area
|
| Make-whole call: | Treasuries plus 25 bps prior to Nov. 1, 2025, then callable at par
|
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