Kellogg sets pricing in tender for $700 million of three note series

By Jennifer Chiou

New York, March 7 - Kellogg Co. announced the pricing terms in its tender offer for up to $700 million of three series of senior notes.

For each $1,000 principal amount, the company will pay a total consideration of $946.88 for the 2.75% senior notes due 2023, $988.00 for the 3.125% senior notes due 2022 and $1,073.06 for the 4% senior notes due 2020.

The notes are listed in order of priority acceptance level.

The amounts include a $30.00 early tender premium for those who tender by 5 p.m. ET on March 7, the early tender date.

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.

Pricing for the notes was set using the bid-side price of a reference security at 2 p.m. ET on March 7. The company used the 2.75% U.S. Treasury notes due Feb. 15, 2024 plus 65 for the 2.75% notes, the 2.75% U.S. Treasury notes due Feb. 15, 2024 plus 50 bps for the 3.125% notes and the 2% U.S. Treasury notes due Nov. 30, 2020 plus 60 bps for the 4% notes.

The offer involves any and all of the $400 million of 2.75% notes, up to $500 million of the $700 million of outstanding 3.125% notes and up to $100 million of the $1 billion of outstanding 4% senior notes due 2020.

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

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

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. It launched the offer on Feb. 24.

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