Kraft Heinz accepts $2.14 billion of early tendered notes

By Marisa Wong

Los Angeles, May 18 – Kraft Heinz Co. announced the early results of 100% owned subsidiary Kraft Heinz Foods Co.’s cash tender offer to purchase notes from seven series for up to $2.2 billion.

The company launched the original offer on May 4 for five series of notes for an aggregate purchase price of $1.2 billion. The following day, the company expanded the offer to include two additional series of notes and increase the maximum aggregate purchase price to $2.2 billion.

As of 5 p.m. ET on May 15, the early tender time, holders had tendered the following, with the notes listed in order of acceptance priority and with the total consideration per $1,000 principal amount:

• $538,788,000 of the $650 million outstanding floating-rate senior notes due February 2021 (Cusip: 50077LAP1), all of which will be accepted for purchase at $1,000;

• $488,121,000 of the $1,119,384,000 outstanding 3.5% senior notes due June 2022 (Cusip: 50076QAZ9, 50076QAF3, U5009CAC4), all of which will be accepted for purchase at $1,040;

• $143.59 million of the $445,861,000 outstanding 3.5% senior notes due July 2022 (Cusip: 50077LAJ5, 423074BA0, U42314AF8), all of which will be accepted for purchase at $1,035;

• $184,522,000 of the $500 million outstanding floating-rate senior notes due August 2022 (Cusip: 50077LAQ9), all of which will be accepted for purchase at $987.50;

• $390,829,000 of the $838,131,000 outstanding 4% senior notes due June 2023 (Cusip: 50077LAS5), all of which will be accepted for purchase at $1,047.50;

• $1,047,779,000 of the $2 billion 3.95% senior notes due July 2025 (Cusip: 50077LAK2, 423074AX1, U42314AD3), $391,295,000 of which will be accepted for purchase at $1,056.25, at a proration factor of 37.4%; and

• $1,101,227,000 of the $2 billion 3% senior notes due June 2026 (Cusip: 50077LAD8, 50077LAC0, U5009LAB6), none of which will be accepted for purchase. The purchase price for these notes would have been $1,002.50.

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

However, because the amount of early tenders already exceeded the offer cap, the issuer will not accept for purchase any notes tendered after the early tender time unless the cap is increased, according to a Monday press release.

As previously announced, holders who tendered their notes at or prior to 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, which will be May 19 for the early tendered notes. Settlement of any remaining tenders is expected to occur on June 1.

Tenders may no longer be withdrawn.

The tender offer is conditioned on Kraft Heinz receiving proceeds of at least $2.5 billion from a concurrent offering of new notes. Originally, the tender offer was conditioned on financing of at least $1.5 billion.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.