By Aleesia Forni
Virginia Beach, June 23 – H.J. Heinz Co. priced a $10 billion seven-part bond offering (Baa3/BBB-/) on Tuesday, according to a market source.
The sale included a $1 billion of 1.6% two-year notes priced at 99.937 to yield 1.632%, or Treasuries plus 95 basis points.
The tranche priced at the tight end of guidance for a spread in the Treasuries plus 100 bps area, having tightened from talk in the Treasuries plus 110 bps area.
A second tranche was $1.5 billion of 2% three-year notes sold with a spread of 100 bps over Treasuries.
The notes sold at 99.8 to yield 2.069%.
Pricing was at the tight end of the Treasuries plus 105 bps area guidance. Initial talk was set in the Treasuries plus 120 bps area.
The company also sold $1.5 billion of 2.8% five-year notes at 99.773 to yield 2.849% with a spread of Treasuries plus 115 bps.
Again the tranche priced tight. Guidance was in the Treasuries plus 120 bps area, firmed from initial talk in the Treasuries plus 140 bps area.
There was also $1 billion of 3.5% seven-year notes sold at 99.764 to yield 3.538%. The notes priced at Treasuries plus 140 bps.
Pricing was at the tight end of the Treasuries plus 145 bps area guidance which tightened from the Treasuries plus 165 bps area talk.
A $2 billion 3.95% 10-year note priced at 99.867 to yield 3.966% with a spread of Treasuries plus 155 bps.
The tranche sold at the tight end of guidance set in the Treasuries plus 160 bps area. Initial talk was set in the Treasuries plus 180 bps area.
Also priced was $1 billion of 5% 20-year notes at 99.049 to yield 5.076%, or Treasuries plus 185 bps.
The 20-year debt came at the tight end of guidance in the Treasuries plus 190 bps area, tightening from initial talk in the Treasuries plus 210 bps area.
Finally, $2 billion of 5.2% 30-year notes sold with a spread of 200 bps over Treasuries. Pricing was at 99.606 to yield 5.226%.
The tranche sold at the tight end of the Treasuries plus 205 bps area guidance which had firmed from talk in the 225 bps area over Treasuries.
Plans for two- and three-year floating-rate tranches were dropped prior to the deal’s launch.
Proceeds will be used to fund the company’s merger with Kraft Foods Group Inc., which will be renamed Kraft Heinz Foods Co.
Barclays, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are bookrunners for the Rule 144A and Regulation S deal.
Heinz is a Pittsburgh-based food processing company. Kraft is a Northfield, Ill.-based food company.
| Issuer: | H.J. Heinz Co.
|
| Guarantor: | H.J. Heinz Holding Corp.
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| Issue: | Senior notes
|
| Amount: | $10 billion
|
| Bookrunners: | Barclays, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Securities LLC
|
| Trade date: | June 23
|
| Settlement date: | June 30
|
| Ratings: | Moody’s: Baa3
|
| Standard & Poor’s: BBB-
|
| Distribution: | Rule 144A, Regulation S
|
|
|
| Two-year notes
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| Amount: | $1 billion
|
| Maturity: | June 30, 2017
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| Coupon: | 1.6%
|
| Price: | 99.937
|
| Yield: | 1.632%
|
| Spread: | Treasuries plus 95 bps
|
| Price guidance: | Treasuries plus 100 bps area, tightened from Treasuries plus 110 bps area
|
|
|
| Three-year notes
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| Amount: | $1.5 billion
|
| Maturity: | July 2, 2018
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| Coupon: | 2%
|
| Price: | 99.8
|
| Yield: | 2.069%
|
| Spread: | Treasuries plus 100 bps
|
| Price guidance: | Treasuries plus 105 bps area, tightened from Treasuries plus 120 bps area
|
|
|
| Five-year notes
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| Amount: | $1.5 billion
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| Maturity: | July 2, 2020
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| Coupon: | 2.8%
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| Price: | 99.773
|
| Yield: | 2.849%
|
| Spread: | Treasuries plus 115 bps
|
| Price guidance: | Treasuries plus 120 bps area, tightened from Treasuries plus 140 bps area
|
|
|
| Seven-year notes
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| Amount: | $1 billion
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| Maturity: | July 15, 2022
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| Coupon: | 3.5%
|
| Price: | 99.764
|
| Yield: | 3.538%
|
| Spread: | Treasuries plus 140 bps
|
| Price guidance: | Treasuries plus 145 bps area, tightened from Treasuries plus 165 bps area
|
|
|
| Ten-year notes
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| Amount: | $2 billion
|
| Maturity: | July 15, 2025
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| Coupon: | 3.95%
|
| Price: | 99.867
|
| Yield: | 3.966%
|
| Spread: | Treasuries plus 155 bps
|
| Price guidance: | Treasuries plus 160 bps area, tightened from Treasuries plus 180 bps area
|
|
|
| Twenty-year bonds
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| Amount: | $1 billion
|
| Maturity: | July 15, 2035
|
| Coupon: | 5%
|
| Price: | 99.049
|
| Yield: | 5.076%
|
| Spread: | Treasuries plus 185 bps
|
| Price guidance: | Treasuries plus 190 bps area, tightened from Treasuries plus 210 bps area
|
|
|
| Thirty-year bonds
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| Amount: | $2 billion
|
| Maturity: | July 15, 2045
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| Coupon: | 5.2%
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| Price: | 99.606
|
| Yield: | 5.226%
|
| Spread: | Treasuries plus 200 bps
|
| Price guidance: | Treasuries plus 205 bps area, tightened from 225 bps area
|
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