By Cristal Cody
Chicago, March 15 – British American Tobacco priced three notes on Monday for $2.3 billion (Baa2/BBB+) through B.A.T. Capital Corp. and B.A.T. International Finance plc, according to an FWP filed with the Securities and Exchange Commission.
B.A.T. Capital notes
B.A.T. Capital sold $1.3 billion of notes in two parts.
The B.A.T. Capital tranches will be guaranteed by British American Tobacco plc, B.A.T. International Finance, B.A.T. Netherlands Finance BV and Reynolds American Inc.
The breakdown is $700 million of 4.742% 10-year senior notes and $600 million of 5.65% 30-year senior notes.
The 10-year notes priced at par to yield 4.742%, or a spread of Treasuries plus 260 basis points. Price talk was in the Treasuries plus 270 bps area, according to a market source.
The 30-year notes came at 96.503 to yield 5.9%, or alternatively priced with a spread of Treasuries plus 340 bps. Spread talk was in the 360 bps area.
In terms of an early redemption, the 10-year notes can be redeemed at any time with a make-whole premium of Treasuries plus 40 bps until the par call date on Dec. 16, 2031.
The 30-year notes can also be redeemed at any time. The make-whole premium would be Treasuries plus 50 bps until the par call date on Sept. 16, 2051.
B.A.T. International notes
A single tranche for $1 billion of 4.448% six-year notes came from the other issuer, B.A.T. International.
The B.A.T. International Finance notes will be guaranteed by British American Tobacco, B.A.T. Capital, B.A.T. Netherlands and Reynolds American.
The tranche priced at par with a spread of 235 bps over the benchmark Treasury. Price talk was in the 250 bps area over Treasuries.
Like the other two parts, the notes can be redeemed at any point early with a make-whole premium. The make-whole spread is Treasuries plus 40 bps until the par call date on Feb. 16, 2028.
Other details
Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC and SMBC Nikko Securities America, Inc. are the joint bookrunners.
Bank of China Ltd., London Branch, Commerz Markets LLC, Lloyds Securities Inc. and Standard Chartered Bank are also listed as bookrunners.
Proceeds will be used for general corporate purposes, including the repayment of upcoming maturities.
British American Tobacco is a London-based international tobacco company.
| Issuer: | British American Tobacco
|
| Amount: | $2.3 billion
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| Issue: | Senior notes
|
| Bookrunners: | Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC, SMBC Nikko Securities America, Inc. (managers), Bank of China Ltd., London Branch, Commerz Markets LLC, Lloyds Securities Inc. and Standard Chartered Bank
|
| Trustee: | Citibank, NA
|
| Counsel to issuer: | Cravath, Swaine & Moore LLP, Linklaters LLP, Stibbe NV, Womble Bond Dickinson (US) LLP
|
| Counsel to bookrunners: | Davis Polk & Wardwell London LLP
|
| Trade date: | March 14
|
| Settlement date: | March 16
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB+
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
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| Issuer: | B.A.T. Capital Corp.
|
| Amount: | $700 million
|
| Guarantors: | British American Tobacco plc, B.A.T. International Finance, B.A.T. Netherlands Finance BV and Reynolds American Inc.
|
| Maturity: | March 16, 2032
|
| Coupon: | 4.742%
|
| Price: | Par
|
| Yield: | 4.742%
|
| Spread: | Treasuries plus 260 bps
|
| Call features: | Make-whole call at Treasuries plus 40 bps until Dec. 16, 2031; thereafter at par
|
| Price talk: | 270 bps area over Treasuries
|
| Cusip: | 05526DBW4
|
|
|
| 30-year notes
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| Issuer: | B.A.T. Capital Corp.
|
| Amount: | $600 million
|
| Guarantors: | British American Tobacco plc, B.A.T. International Finance, B.A.T. Netherlands Finance BV and Reynolds American Inc.
|
| Maturity: | March 16, 2052
|
| Coupon: | 5.65%
|
| Price: | 96.503
|
| Yield: | 5.9%
|
| Spread: | Treasuries plus 340 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 16, 2051; thereafter at par
|
| Price talk: | 360 bps area over Treasuries
|
| Cusip: | 05526DBV6
|
|
|
| Six-year notes
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| Issuer: | B.A.T. International Finance plc
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| Amount: | $1 billion
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| Guarantor: | British American Tobacco, B.A.T. Capital, B.A.T. Netherlands and Reynolds American
|
| Maturity: | March 16, 2028
|
| Coupon: | 4.448%
|
| Price: | Par
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| Yield: | 4.448%
|
| Spread: | Treasuries plus 235 bps
|
| Call features: | Make-whole call at Treasuries plus 40 bps until Feb. 16, 2028; thereafter at par
|
| Price talk: | 250 bps area over Treasuries
|
| Cusip: | 05530QAP5
|
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