Keurig Dr Pepper plans floaters, fixed-rate notes in five parts

By Marisa Wong

Los Angeles, March 4 – Keurig Dr Pepper Inc. is offering a tranche of floating-rate senior notes due 2027 and four tranches of fixed-rate senior notes due in 2027, 2029, 2031 and 2034, according to a 424B3 filing with the Securities and Exchange Commission.

The floating-rate notes will have a coupon based on compounded SOFR plus a spread. The floaters will not be callable.

The fixed-rate notes will feature a make-whole call option until some months prior to maturity, and then they will be callable at par. The par call date will be one month prior to the maturity date for the 2027 and 2029 notes, two months prior to the maturity date for the 2031 notes and three months prior to the maturity date for the 2034 notes.

The notes are also subject to a change-of-control put at 101.

BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Mizuho Securities USA LLC are the joint bookrunners.

U.S. Bank Trust Co., NA is the trustee.

Skadden, Arps, Slate, Meagher & Flom LLP will be counsel for the issuer, with in-house counsel handling some matters of New Jersey law. Weil, Gotshal & Manges LLP will be counsel for the underwriters.

The company intends to use a portion of the proceeds from the offering to fund a repurchase of common stock and the remainder for general corporate purposes, including repayment of outstanding commercial paper borrowings and/or some of its outstanding senior notes. Under the stock buyback, the issuer will repurchase 35 million of shares offered by a subsidiary of JAB Holding Co. Sarl. The repurchase is expected to be completed on March 8.

The beverage company is based in Burlington, Mass.

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