By Cristal Cody
Chicago, Aug. 1 – British American Tobacco priced $5 billion of notes over five tranches on Monday through two issuing entities (Baa2/BBB+), according to an FWP filed with the Securities and Exchange Commission and details from a market source.
Capital
B.A.T Capital Corp. is the issuer for $4 billion, or four of the notes.
The notes will be guaranteed by British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
All of the notes priced at par.
The deal included:
• $1 billion of 6.343% notes due 2030, with the spread coming at 225 basis points over the benchmark Treasury versus talk in the 250 bps area;
• $1.25 billion of 6.421% notes due 2033, priced at 245 bps over Treasuries compared to talk in the 270 bps area;
• $750 million of 7.079% notes due 2043, priced at 285 bps to Treasuries, tighter than talk that was in the Treasuries plus 310 bps area; and
• $1 billion of 7.081% notes due 2053, priced at 305 bps against Treasuries versus spread talk in the 330 bps area.
All of the notes have make-whole call provisions. The notes may be called with make-whole premiums until two months, three months or six months before their maturity dates. The make-whole premiums are Treasuries plus 35 bps, 40 bps, 45 bps and 50 bps, respectively. After the make-whole periods, the notes will be callable at par.
International
B.A.T. International Finance priced $1 billion of 5.931% notes due 2029.
British American Tobacco, B.A.T Capital, B.A.T. Netherlands Finance and Reynolds American will be guaranteeing the notes.
The single series is for $1 billion of 5.931% notes due 2029. The notes priced at Treasuries plus 175 bps versus talk in the 200 bps area.
Like the other four series, the notes priced at par.
The notes have make-whole call provisions with a premium of Treasuries plus 30 bps before Jan. 2, 2029, then are callable at par.
Other
BofA Securities, Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Santander US Capital Markets LLC and Wells Fargo Securities, LLC are working as joint bookrunners.
Citigroup Global Markets Inc., Commerz Markets LLC, Mizuho Securities USA LLC and SMBC Nikko Securities America, Inc. are also bookrunners.
Proceeds will be used to fund a concurrent tender offer, with any remaining proceeds earmarked for general corporate purposes.
The notes will be listed on the New York Stock Exchange.
British American Tobacco is a London-based international tobacco company.
| Issuer: | British American Tobacco
|
| Amount: | $5 billion
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| Issue: | Notes
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| Bookrunners: | BofA Securities, Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Santander US Capital Markets LLC, Wells Fargo Securities, LLC (joint bookrunners), Citigroup Global Markets Inc., Commerz Markets LLC, Mizuho Securities USA LLC and SMBC Nikko Securities America, Inc.
|
| Co-managers: | Bank of China Ltd., London Branch, Barclays, BBVA Securities Inc., HSBC Securities (USA) Inc., Lloyds Securities Inc., NatWest Markets Securities Inc. and Standard Chartered Bank
|
| Trustee: | Citibank, NA
|
| Counsel to issuer: | Cravath, Swaine & Moore LLP, Linklaters LLP, Stibbe NV and Womble Bond Dickinson (US) LLP
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| Counsel to underwriters: | Davis Polk & Wardwell London LLP
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| Trade date: | July 31
|
| Settlement date: | Aug. 2
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB+
|
| Distribution: | SEC registered
|
|
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| 2030 notes
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| Issuer: | B.A.T Capital Corp.
|
| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
|
| Amount: | $1 billion
|
| Maturity: | Aug. 2, 2030
|
| Coupon: | 6.343%
|
| Price: | Par
|
| Yield: | 6.343%
|
| Spread: | Treasuries plus 225 bps
|
| Call features: | Make-whole call at Treasuries plus 35 bps until June 2, 2030; thereafter at par
|
| Price talk: | Treasuries plus 250 bps area
|
| Cusip: | 054989AA6
|
|
|
| 2033 notes
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| Issuer: | B.A.T Capital Corp.
|
| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
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| Amount: | $1.25 billion
|
| Maturity: | Aug. 2, 2033
|
| Coupon: | 6.421%
|
| Price: | Par
|
| Yield: | 6.421%
|
| Spread: | Treasuries plus 245 bps
|
| Call features: | Make-whole call at Treasuries plus 40 bps until May 2, 2033; thereafter at par
|
| Price talk: | Treasuries plus 270 bps area
|
| Cusip: | 054989AB4
|
|
|
| 2043 notes
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| Issuer: | B.A.T Capital Corp.
|
| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
|
| Amount: | $750 million
|
| Maturity: | Aug. 2, 2043
|
| Coupon: | 7.079%
|
| Price: | Par
|
| Yield: | 7.079%
|
| Spread: | Treasuries plus 285 bps
|
| Call features: | Make-whole call at Treasuries plus 45 bps until Feb. 2, 2043; thereafter at par
|
| Price talk: | Treasuries plus 310 bps area
|
| Cusip: | 054989AC2
|
|
|
| 2053 notes
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| Issuer: | B.A.T Capital Corp.
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| Guarantors: | British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc.
|
| Amount: | $1 billion
|
| Maturity: | Aug. 2, 2053
|
| Coupon: | 7.081%
|
| Price: | Par
|
| Yield: | 7.081%
|
| Spread: | Treasuries plus 305 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Feb. 2, 2053; thereafter at par
|
| Price talk: | Treasuries plus 330 bps area
|
| Cusip: | 054989AD0
|
|
|
| 2029 notes
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| Issuer: | B.A.T. International Finance plc
|
| Guarantors: | British American Tobacco plc, B.A.T Capital Corp., B.A.T. Netherlands Finance BV and Reynolds American Inc.
|
| Amount: | $1 billion
|
| Maturity: | Feb. 2, 2029
|
| Coupon: | 5.931%
|
| Price: | Par
|
| Yield: | 5.931%
|
| Spread: | Treasuries plus 175 bps
|
| Call features: | Make-whole call at Treasuries plus 30 bps until Jan. 2, 2029; thereafter at par
|
| Price talk: | Treasuries plus 200 bps area
|
| Cusip: | 05530QAQ3
|
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