Published on 2/14/2019 in the Prospect News Investment Grade Daily.
New Issue: Tyson Foods details $2.8 billion of senior notes in three tranches
By Devika Patel
Knoxville, Tenn., Feb. 14 – Tyson Foods, Inc. offered further details about a $2.8 billion sale of senior notes (Baa2/BBB/BBB) that priced in three tranches on Wednesday on the tight side of guidance, according to an FWP filed with the Securities and Exchange Commission.
The company placed $800 million of 4% seven-year notes at a spread of Treasuries plus 145 basis points. These notes priced at 99.647 to yield 4.058%.
A $1 billion tranche of 4.35% 10-year notes was priced with a Treasuries plus 165 bps spread. These notes priced at 99.982 to yield 4.352%.
Tyson also brought a $1 billion add-on to its 5.1% senior notes due Sept. 28, 2048 at a spread of 230 bps over Treasuries. These notes priced at 96.718 to yield 5.321%.
The notes originally priced Sept. 25, 2018 in a $500 million offering at 99.574 to yield 5.128% and a Treasuries plus 190 bps spread. The total outstanding is now $1.5 billion.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, Barclays, RBC Capital Markets, LLC and Goldman Sachs & Co. LLC were the bookrunners.
Proceeds will be used to repay debt under the company’s term loan facility and commercial paper obligations and to fund the company’s planned acquisition of the Thai and European operations of BRF SA for $340 million in cash.
The meat and food production company is based in Springdale, Ark.
| Issuer: | Tyson Foods, Inc.
|
| Amount: | $2.8 billion
|
| Description: | Senior notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch, Barclays, RBC Capital Markets, LLC and Goldman Sachs & Co. LLC
|
| Senior co-manager: | Rabo Securities USA, Inc.
|
| Co-managers: | Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc., MUFG, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC and Regions Securities LLC
|
| Trade date: | Feb. 13
|
| Settlement date: | Feb. 19
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Fitch: BBB
|
| Distribution: | SEC registered
|
|
|
| Seven-year notes
|
| Amount: | $800 million
|
| Maturity: | March 1, 2026
|
| Coupon: | 4%
|
| Price: | 99.647
|
| Yield: | 4.058%
|
| Spread: | Treasuries plus 145 bps
|
| Call: | Make-whole call at Treasuries plus 25 bps until Jan. 1, 2026, then a par call
|
| Price guidance: | Treasuries plus 150 bps area, plus or minus 5 bps; initial talk at Treasuries plus 180 bps area
|
|
|
| 10-year notes
|
| Amount: | $1 billion
|
| Maturity: | March 1, 2029
|
| Coupon: | 4.35%
|
| Price: | 99.982
|
| Yield: | 4.352%
|
| Spread: | Treasuries plus 165 bps
|
| Call: | Make-whole call at Treasuries plus 25 bps until Dec. 1, 2028, then a par call
|
| Price guidance: | Treasuries plus 170 bps area, plus or minus 5 bps; initial talk at Treasuries plus 190 bps area
|
|
|
| Reopened notes due 2048
|
| Amount: | $1 billion reopening
|
| Maturity: | Sept. 28, 2048
|
| Coupon: | 5.1%
|
| Price: | 96.718
|
| Yield: | 5.321%
|
| Spread: | Treasuries plus 230 bps
|
| Call: | Make-whole call at Treasuries plus 30 bps until March 28, 2048, then a par call
|
| Price guidance: | Treasuries plus 235 bps area, plus or minus 5 bps; initial talk at Treasuries plus 255 bps area
|
| Total outstanding: | $1.5 billion, including $500 million of notes priced Sept. 25, 2018 at 99.574 to yield 5.128%, or Treasuries plus 190 bps
|
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