Kellogg begins tender offer for $700 million of three note series

By Susanna Moon

Chicago, Feb. 24 - Kellogg Co. said it began a tender offer for up to $700 million of three series of senior notes.

Pricing for the notes will be set using the bid-side price of a reference security at 2 p.m. ET on March 7 plus a fixed spread as listed below in order of priority acceptance level:

• $400 million of 2.75% senior notes due 2023 using 2.75% U.S. Treasury notes due Feb. 15, 2024 plus 65 basis points;

• $700 million of 3.125% senior notes due 2022, with a sub-cap of $500 million, using 2.75% U.S. Treasury notes due Feb. 15, 2024 plus 50 bps; and

• $1 billion of 4% senior notes due 2020, with a sub-cap of $100 million, using 2% U.S. Treasury notes due Nov. 30, 2020 plus 60 bps.

The hypothetical total purchase price for each $1,000 principal amount will be $950.90 for the 2.75% notes, $991.83 for the 3.125% notes and $1,077.47 for the 4% notes, using the bid-side price of the reference securities at 2 p.m. ET on Feb. 21 and an early settlement date of March 10, according to a company press release.

The total purchase price will include an early tender premium of $30 per $1,000 of notes tendered by 5 p.m. ET on March 7, the early tender date.

The tender offer will end at 11:59 p.m. ET on March 21.

Tendered notes may be withdrawn at any time by the early tender deadline.

Holders who tender their notes after the early tender date will receive the total purchase price less the early tender premium.

The company also will pay accrued interest up to but excluding the settlement date, which will be March 10 for early tendered notes and March 24 for remaining tenders.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106 collect), J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811 collect) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760 collect) are the lead dealer managers. D.F. King & Co., Inc. (800 967-4617 or 212 269-5550 collect or email kellogg@dfking.com) is the information agent and tender agent.

Kellogg is a maker of cereal and convenience foods is based in Battle Creek, Mich.

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