Just a day after its offer for the British chocolatier was declared unconditional, Kraft is looking to refinance the £7.1bn bridge loan it took on to fund the £11.7bn cash-and-scrip bid.
The US food company is planning a “jumbo” four-part debt sale, at a minimum of $1.0bn per tranche. The offering is expected to include 3.25-year, 6-year, 10-year and 30-year senior unsecured notes and will be priced either later today or tomorrow morning.
Now to put things in perspective, Kraft’s 2018 notes are trading at 140 basis points above Treasuries, and the 2039 notes at 170bps.
Kraft is rated Baa2 (negative outlook) by Moody’s Investors and BBB- (positive outlook) by Standard & Poor’s.
The market has been expecting a large issue from Kraft.
Nevertheless it will be interesting to see where it prices.
The full prospectus can be found in the usual place but here is a quick summary of the covenants:
We will issue the notes under an indenture containing covenants that restrict our ability, with significant exceptions, to:
• incur debt secured by liens above a certain threshold; • engage in certain sale and leaseback transactions above a certain threshold;
and
• consolidate, merge, convey or transfer our assets substantially as an entirety.
Pricing details when available.
Related links:
Cadbury melts away – FT Alphaville
Kraft’s credit – FT Alphaville
Kradbury – a ‘bad deal’ - FT Alphaville