By Andrea Heisinger
New York, June 1 - Applied Materials, Inc. tapped the primary for $1.75 billion of senior notes (A3/A-) on Wednesday in three tranches, an informed source said.
The $400 million of 2.65% five-year notes sold at 99.925 to yield 2.666% with a spread of Treasuries plus 107 basis points. They were sold below talk set in the 115 bps area.
The notes have a make-whole call at Treasuries plus 15 bps.
A second part was $750 million of 10-year notes priced at 99.789 to yield 4.326% with a spread of 138 bps over Treasuries. It priced at the tight end of guidance in the 140 bps area.
The 10-year notes are callable at a make-whole premium of Treasuries plus 20 bps.
There was also a $600 million tranche of 5.85% 30-year bonds sold at 99.592 to yield 5.879% with a spread of 175 bps over Treasuries. It priced in line with talk in the 175 bps area.
The bonds have a make-whole call at 30 bps over Treasuries.
Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were active bookrunners. Mitsubishi UFJ Securities International plc and Morgan Stanley & Co., Inc. were passive.
Proceeds are going to help fund the cash merger with Varian Semiconductor Associates Inc. Other funding will come from cash on hand and proceeds from borrowings under a revolving credit facility.
There is a change-of-control put at 101 if the notes are downgraded below investment-grade, or if the Varian merger is not done by May 31, 2012.
The semiconductor and electronic components company is based in Santa Clara, Calif.
| Issuer: | Applied Materials, Inc.
|
| Issue: | Senior notes
|
| Amount: | $1.75 billion
|
| Bookrunners: | Citigroup Global Markets Inc., J.P. Morgan Securities LLC (active), Mitsubishi UFJ Securities International plc, Morgan Stanley & Co., Inc. (passive)
|
| Change-of-control put: | At 101 if ratings drop or Varian merger not completed by May 31, 2012
|
| Trade date: | June 1
|
| Settlement date: | June 9
|
| Ratings: | Moody's: A3
|
| Standard & Poor's: A-
|
|
|
| Five-year notes
|
| Amount: | $400 million
|
| Maturity: | June 15, 2016
|
| Coupon: | 2.65%
|
| Price: | 99.925
|
| Yield: | 2.666%
|
| Spread: | Treasuries plus 107 bps
|
| Call: | Make-whole at Treasuries plus 15 bps
|
| Price talk: | 115 bps area
|
|
|
| Ten-year notes
|
| Amount: | $750 million
|
| Maturity: | June 15, 2021
|
| Coupon: | 4.3%
|
| Price: | 99.789
|
| Yield: | 4.326%
|
| Spread: | Treasuries plus 138 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 140 bps area
|
|
|
| Thirty-year bonds
|
| Amount: | $600 million
|
| Maturity: | June 15, 2041
|
| Coupon: | 5.85%
|
| Price: | 99.592
|
| Yield: | 5.879%
|
| Spread: | Treasuries plus 175 bps
|
| Call: | Make-whole at Treasuries plus 30 bps
|
| Price talk: | 175 bps area
|
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