By Cristal Cody
Chicago, Feb. 16 – B.A.T. Capital Corp. priced a $1.7 billion dual-tranche offering of notes (Baa2/BBB+/BBB) on Thursday, according to an FWP filed with the Securities and Exchange Commission and details from a market source.
The equal-sized tranches will have tenors of seven and 10 years.
The seven-year tranche priced with a 5.834% coupon at par, or at Treasuries plus 158 basis points. Talk started in the 195 bps area.
The 6% 10-year notes priced at 99.437 to yield 6.076%, or at Treasuries plus 183 bps. Initial talk was in the 215 bps area.
The notes feature an optional make-whole call, followed by an optional par call. The make-whole spreads are 25 bps for the 2031 notes and 30 bps for the 2034 notes. The par call date will be two months prior to maturity for the 2031 notes and three months prior to maturity for the 2034 notes.
Barclays, HSBC Securities (USA) Inc., Mizuho Securities USA LLC, Santander US Capital Markets LLC and Wells Fargo Securities, LLC led the sale. BBVA Securities Inc., NatWest Markets Securities Inc., SMBC Nikko Securities America and Standard Chartered Bank were also bookrunners.
The company intends to use proceeds for general corporate purposes, including the potential repayment of existing debt.
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.
The issuer is based in Wilmington, Del. Parent British American Tobacco is a London-based international tobacco company.
| Issuer: | B.A.T. Capital Corp.
|
| Guarantor: | 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: | $1.7 billion
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| Issue: | Notes
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| Bookrunners: | Barclays, HSBC Securities (USA) Inc., Mizuho Securities USA LLC, Santander US Capital Markets LLC, Wells Fargo Securities, LLC (lead), BBVA Securities Inc., NatWest Markets Securities Inc., SMBC Nikko Securities America and Standard Chartered Bank
|
| Trustee: | Citibank, NA
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| Counsel to issuer: | Cravath, Swaine & Moore LLP, Linklaters LLP, Stibbe NV, Womble Bond Dickinson (US) LLP
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| Counsel to underwriters: | Davis Polk & Wardwell London LLP
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| Trade date: | Feb. 15
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| Settlement date: | Feb. 20
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| Ratings: | Moody’s: Baa2
|
| S&P: BBB+
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| Fitch: BBB
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| Distribution: | SEC registered
|
|
|
| Seven-year notes
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| Amount: | $850 million
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| Maturity: | Feb. 20, 2031
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| Coupon: | 5.834%
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| Price: | Par
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| Yield: | 5.834%
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| Spread: | Treasuries plus 158 bps
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| Call features: | Make-whole call at Treasuries plus 25 bps; par call starts Dec. 20, 2030
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| Price talk: | Treasuries plus 195 bps area
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| Cusip: | 05526DBY0
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|
|
| 10-year notes
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| Amount: | $850 million
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| Maturity: | Feb. 20, 2034
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| Coupon: | 6%
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| Price: | 99.437
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| Yield: | 6.076%
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| Spread: | Treasuries plus 183 bps
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| Call features: | Make-whole call at Treasuries plus 30 bps; par call starts Nov. 20, 2033
|
| Price talk: | Treasuries plus 215 bps area
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| Cusip: | 05526DBZ7
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