By Andrea Heisinger
New York, Aug. 24 - Illinois Tool Works, Inc. priced $1 billion of senior notes (A1/A+/) in two maturities on Wednesday, said a source close to the sale.
A $350 million tranche of 3.375% 10-year notes was priced at 99.552 to yield 3.428% with a spread of Treasuries plus 115 basis points. The notes were priced at the low end of talk in the 120 bps area, plus or minus 5 bps.
The notes have a make-whole call at 20 bps over Treasuries.
A $650 million tranche of 4.875% 30-year bonds sold at 99.539 to yield 4.969% with a spread of 135 bps over Treasuries. A source said the bonds were sold at the tight end of guidance, which was in the 140 bps area, plus or minus 5 bps.
The notes have a make-whole call at Treasuries plus 25 bps.
The notes were sold under Rule 144A and Regulation S.
Bank of America Merrill Lynch and J.P. Morgan Securities LLC ran the books.
Proceeds are being used to repay short-term debt, including commercial paper, and for general corporate purposes.
The company last sold debt in a $1.5 billion trade in two tranches on March 23, 2009. The 6.25% 10-year notes from that sale were priced at 360 bps over Treasuries.
The global diversified manufacturer of engineered and specialty products is based in Glenview, Ill.
| Issuer: | Illinois Tool Works, Inc.
|
| Issue: | Senior notes
|
| Amount: | $1 billion
|
| Bookrunners: | Bank of America Merrill Lynch, J.P. Morgan Securities LLC
|
| Distribution: | Rule 144A and Regulation S
|
| Trade date: | Aug. 24
|
| Settlement date: | Aug. 31
|
| Ratings: | Moody's: A1
|
| Standard & Poor's: A+
|
|
|
| 10-year notes
|
| Amount: | $350 million
|
| Maturity: | Sept. 15, 2021
|
| Coupon: | 3.375%
|
| Price: | 99.552
|
| Yield: | 3.428%
|
| Spread: | Treasuries plus 115 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 120 bps area, plus or minus 5 bps
|
|
|
| 30-year bonds
|
| Amount: | $650 million
|
| Maturity: | Sept. 15, 2041
|
| Coupon: | 4.875%
|
| Price: | 99.539
|
| Yield: | 4.969%
|
| Spread: | Treasuries plus 135 bps
|
| Call: | Make-whole at Treasuries plus 25 bps
|
| Price talk: | 140 bps area, plus or minus 5 bps
|
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