By Cristal Cody
Tupelo, Miss., Feb. 12 – Altria Group Inc. sold $11.5 billion of senior notes (A3/BBB) in seven tranches on Tuesday, according to a market source.
The company priced $1 billion of 3.49% three-year notes with a spread of 100 basis points over Treasuries.
A $1 billion tranche of 3.8% five-year notes was priced with a Treasuries plus 135 bps spread.
Altria sold $1.5 billion of 4.4% seven-year notes at a spread of 185 bps over Treasuries.
A $3 billion tranche of 4.8% 10-year notes was sold with a 215 bps over Treasuries spread.
The company placed $2 billion of 5.8% 20-year notes at a spread of 280 bps over Treasuries.
A $2.5 billion tranche of 5.95% 30-year notes was sold with a Treasuries plus 295 bps spread.
In the final slice, the company sold $500 million of 6.2% 40-year notes at a spread of 320 bps over Treasuries.
The notes priced on the tight side of guidance and better than initial talk.
The offering was upsized from an initially expected six-tranche deal.
Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and Scotia Capital (USA) Inc. were the bookrunners.
The notes are guaranteed by Philip Morris USA Inc.
Proceeds will be used to prepay borrowings under the company’s term loan agreement and for general corporate purposes.
Altria also priced a €4.25 billion four-part offering of reverse Yankee bonds on Monday.
The Richmond, Va.-based company produces cigarette and tobacco products.
Issuer: | Altria Group Inc.
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Guarantor: | Philip Morris USA Inc.
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Amount: | $11.5 billion
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Description: | Senior notes
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Bookrunners: | Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and Scotia Capital (USA) Inc.
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Trade date: | Feb. 12
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Ratings: | Moody’s: A3
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| S&P: BBB
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Distribution: | SEC registered
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Marketing: | Roadshow
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Three-year notes
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Amount: | $1 billion
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Maturity: | Feb. 14, 2022
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Coupon: | 3.49%
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Spread: | Treasuries plus 100 bps
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Price guidance: | Treasuries plus 105 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 130 bps area
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Five-year notes
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Amount: | $1 billion
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Maturity: | Feb. 14, 2024
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Coupon: | 3.8%
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Spread: | Treasuries plus 135 bps
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Price guidance: | Treasuries plus 140 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 165 bps area
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Seven-year notes
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Amount: | $1.5 billion
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Maturity: | Feb. 14, 2026
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Coupon: | 4.4%
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Spread: | Treasuries plus 185 bps
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Price guidance: | Treasuries plus 190 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 215 bps area
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10-year notes
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Amount: | $3 billion
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Maturity: | Feb. 14, 2029
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Coupon: | 4.8%
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Spread: | Treasuries plus 215 bps
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Price guidance: | Treasuries plus 220 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 235 bps area
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20-year notes
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Amount: | $2 billion
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Maturity: | Feb. 14, 2039
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Coupon: | 5.8%
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Spread: | Treasuries plus 280 bps
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Price guidance: | Treasuries plus 285 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 300 bps area
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30-year notes
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Amount: | $2.5 billion
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Maturity: | Feb. 14, 2049
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Coupon: | 5.95%
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Spread: | Treasuries plus 295 bps
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Price guidance: | Treasuries plus 300 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 315 bps area
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40-year notes
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Amount: | $500 million
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Maturity: | Feb. 14, 2059
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Coupon: | 6.2%
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Spread: | Treasuries plus 320 bps
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Price guidance: | Treasuries plus 325 bps area, plus or minus 5 bps; initial price talk at Treasuries plus 345 bps area
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