By Paul A. Harris
Portland, Ore., May 4 – Kraft Heinz Foods Co. priced a massively upsized $3.5 billion amount of split-rated senior notes (Baa3/BB+) in three bullet tranches on Monday, according to market sources.
J.P. Morgan Securities LLC was the lead underwriter.
The deal included $1.35 billion of seven-year notes, which priced at par to yield 3 7/8%, tight to talk in the 4% area. Initial talk was in the 4¼% area.
In addition, the company priced $1.35 billion of 10.75-year notes at par to yield 4¼%, in the middle of yield talk in the 4¼% area. Initial talk was in the 4½% area.
In a tranche added subsequent to the deal being announced, Kraft Heinz also priced $800 million of 30-year notes at par to yield 5½%.
The deal size increased from $1.5 billion and was heard to be playing to $9 billion of orders, with a lot of participation from high-yield accounts, sources said.
The food and beverage company, which has corporate headquarters in Chicago and in Pittsburgh, plans to use the proceeds to fund a $1.2 billion tender offer for its floating-rate senior notes due February 2021, its 3½% senior notes due June 2022, its 3½% senior notes due July 2022, its floating-rate senior notes due August 2022 and its 4% senior notes due June 2023. The remaining proceeds will be used to fund the redemption in full of the its $300 million of 3 3/8% senior notes due June 2021.
| Issuer: | Kraft Heinz Foods Co.
|
| Amount: | $3.5 billion, upsized from $1.5 billion
|
| Securities: | Senior notes
|
| Lead: | J.P. Morgan Securities LLC
|
| Trade date: | May 4
|
| Ratings: | Moody's: Baa3
|
| S&P: BB+
|
| Distribution: | Rule 144A and Regulation S
|
|
|
| Seven-year notes
|
| Amount: | $1.35 billion
|
| Maturity: | May 15, 2027
|
| Coupon: | 3 7/8%
|
| Price: | Par
|
| Yield: | 3 7/8%
|
| Spread: | 335 bps
|
| Call protection: | Non-callable
|
| Price talk: | 4% area
|
|
|
| 10.75-year notes
|
| Amount: | $1.35 billion
|
| Maturity: | March 1, 2031
|
| Coupon: | 4¼%
|
| Price: | Par
|
| Yield: | 4¼%
|
| Spread: | 362 bps
|
| Call protection: | Non-callable
|
| Price talk: | 4¼% area
|
|
|
| 30-year notes
|
| Amount: | $800 million
|
| Maturity: | June 1, 2050
|
| Coupon: | 5½%
|
| Price: | Par
|
| Yield: | 5½%
|
| Spread: | 422 bps
|
| Call protection: | Non-callable
|
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