Kraft Heinz launches offer to purchase notes for up to $1.2 billion

By Marisa Wong

Los Angeles, May 4 – Kraft Heinz Co. announced that 100% owned subsidiary Kraft Heinz Foods Co. has begun an offer to purchase for cash up to the maximum combined aggregate purchase price of $1.2 billion, excluding accrued interest, of its outstanding notes from fives series.

Kraft Heinz Foods is offering to purchase the following notes, listed in order of acceptance priority and with the total consideration per $1,000 principal amount:

• $650 million outstanding floating-rate senior notes due February 2021 (Cusip: 50077LAP1) at $1,000;

• $1,119,384,000 outstanding 3.5% senior notes due June 2022 (Cusip: 50076QAZ9, 50076QAF3, U5009CAC4) at $1,040;

• $445,861,000 outstanding 3.5% senior notes due July 2022 (Cusip: 50077LAJ5, 423074BA0, U42314AF8) at $1,035;

• $500 million outstanding floating-rate senior notes due August 2022 (Cusip: 50077LAQ9) at $987.50;

• $838,131,000 outstanding 4% senior notes due June 2023 (Cusip: 50077LAS5) at $1,047.50.

The tender offer will expire at 11:59 p.m. ET on June 1, 2020.

Holders who tender their notes at or prior to 5 p.m. ET on May 15, the early tender time, will be eligible to receive the total consideration, which includes an early tender premium of $30 per $1,000 principal amount.

Holders tendering after the early tender time will be eligible to receive only the tender offer consideration, which is the total consideration less the early tender premium.

In addition, the company will pay accrued interest to but excluding the applicable settlement date.

Early tenders are expected to settle on May 19. Settlement of any remaining tenders is expected to occur on June 1.

The issuer said it intends to accept for purchase all notes tendered at or prior to the early tender time. However, if the offer is fully subscribed as of the early tender time, holders who tender their notes after the early deadline will not have any of their notes accepted for purchase.

Notes tendered at or prior to the early tender time will be accepted for purchase in priority to the other notes tendered after the early tender time, even if those tendered later have a higher acceptance priority level than those tendered earlier.

The tender offer may be subject to proration if the tender cap is exceeded.

Tenders may be withdrawn at any time prior to 5 p.m. ET on May 15.

The tender offer is conditioned on Kraft Heinz receiving proceeds of at least $1.5 billion from a concurrent offering of new notes.

The issuer intends to use excess proceeds from the new notes offering not used to purchase notes in the tender offer to fund the redemption in full of its $300 million of outstanding 3.375% senior notes due June 2021. The redemption, which is conditioned on the new notes, is expected to occur on June 3.

J.P. Morgan Securities (866 834-4666 or 212 834-8553), BofA Securities, Citigroup, Credit Suisse, Deutsche Bank Securities and Wells Fargo Securities are dealer managers for the tender offer.

Global Bondholder Services Corp (https://www.gbsc-usa.com/kraftheinzcompany/, 866 794-2200 or for banks and brokers 212 430-3774) is the tender agent and information agent.

The food and beverage company has headquarters in Pittsburgh and Chicago.

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