Kellogg wraps oversubscribed tender offer for three series of notes

By Susanna Moon

Chicago, March 24 - Kellogg Co. said investors had tendered $189,091,000 of the 2.75% notes due 2023, $341,578,000 of the 3.125% notes due 2022 and $407,560,000 of the 4% notes due 2020 in the tender offer that ended 11:59 p.m. ET on March 21.

The tender offer for three series of notes began on Feb. 24. The notes are listed in order of priority acceptance level.

The company accepted for purchase all of the tendered 2.75% notes, all of the 3.125% notes due 2022 and $149,999,000 of the 4% notes, with settlement set for March 24, according to a company press release.

Since the early tender deadline, 5 p.m. ET on March 7, investors had tendered $100,000 more 3.125% notes and $302,000 4% notes.

As previously announced, the company already had accepted on March 10 for purchase $189,091,000 of the 2.75% notes, $341,478,000 of the 3.125% notes and $149,998,000 of the 4% notes tendered by the early deadline.

Kellogg said on March 10 that it lifted the sub-cap for one series of notes in the tender offer for up to $700 million of three series of senior notes.

The company decided to purchase any and all of its $400 million of 2.75% notes, up to $500 million of its $700 million outstanding 3.125% notes and up to $150 million, up from $100 million, of its $1 billion outstanding 4% notes.

As of 5 p.m. ET on March 7, the early tender date, investors had tendered $189,091,000 of the 2.75% notes, $341,478,000 of the 3.125% notes and $407,258,000 of the 4% notes.

As previously announced, the company paid a total purchase price for each $1,000 principal amount of $946.88 for the 2.75% notes, $988.00 for the 3.125% notes and $1,073.06 for the 4% notes.

The amounts included a $30.00 early tender premium for those who tendered by the early tender date.

The company also will pay accrued interest up to but excluding the settlement date.

Pricing 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 note due Feb. 15, 2024 plus 65 basis points for the 2.75% notes, the 2.75% U.S. Treasury note due Feb. 15, 2024 plus 50 bps for the 3.125% notes and the 2% U.S. Treasury note due Nov. 30, 2020 plus 60 bps for the 4% notes.

Holders who tendered 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 e-mail kellogg@dfking.com) is the information agent and tender agent.

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

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