By Paul A. Harris
St. Louis, June 22 - R.J. Reynolds Tobacco Holdings Inc. priced $500 million of senior secured notes (Ba2/BB+/BB+) in two tranches on Wednesday, according to a market source.
Citigroup and JP Morgan ran the books for the Rule 144A/Regulation S with registration rights issues.
The Winston-Salem, N.C.-based tobacco company priced $300 million of 6½% five-year notes at 99.601 to yield 6.593%. The yield came at a 287.5 basis point spread to U.S. Treasuries, which was the tight end of the Treasuries plus 287.5 to 300 bps price talk.
The company also priced $200 million of 7.3% 10-year notes at 99.846 to yield 7.321%. The yield on the 10-year notes came at a 337.5 basis point spread to Treasuries, on the wide end of the Treasuries plus 325 to 337.5 bps price talk.
The notes will be guaranteed by Reynolds American Inc. and by certain direct and indirect subsidiaries of R.J. Reynolds Tobacco Holdings, Inc.
Proceeds will be used to fund the company's tender for its 7¾% notes due May 2006.
| Issuer: | R.J. Reynolds Tobacco Holdings Inc.
|
| Amount: | $500 million
|
| Security description: | Senior secured notes
|
| Bookrunners: | Citigroup, JP Morgan
|
| Trade date: | June 22
|
| Settlement date: | June 29
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB+
|
| Fitch: BB+
|
|
|
| Five-year notes
|
| Amount: | $300 million
|
| Maturity: | July 15, 2010
|
| Coupon: | 6½%
|
| Price: | 99.601
|
| Yield: | 6.593%
|
| Spread: | 287.5 basis points
|
| Call protection: | Make-whole call at Treasuries plus 50 bps
|
| Price talk: | Treasuries plus 287.5-300 bps
|
|
|
| 10-year notes
|
| Amount: | $200 million
|
| Maturity: | July 15, 2015
|
| Coupon: | 7.3%
|
| Price: | 99.846
|
| Yield: | 7.321%
|
| Spread: | 337.5 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps
|
| Price talk: | Treasuries plus 325-337.5 bps
|
|
|
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