By Aleesia Forni
Virginia Beach, June 9 – Reynolds American Inc. was in the market with a $9 billion six-tranche offering of senior notes (Baa3/BBB-) on Tuesday, according to a syndicate source.
A $1.25 billion tranche of 2.3% three-year notes priced at 99.983 to yield 2.306%, or Treasuries plus 120 basis points.
The notes sold at the tight end of revised guidance set in the Treasuries plus 125 bps area, which had firmed from initial talk in the Treasuries plus 165 bps area.
A $1.25 billion 3.25% five-year note sold with a spread of Treasuries plus 150 bps. Pricing was at 99.982 to yield 3.254%.
The tranche sold at the tight end of the Treasuries plus 155 bps area guidance after having tightened from initial talk set in the Treasuries plus 185 bps area.
There was $1 billion of 4% seven-year notes priced at 99.861 to yield 4.023% with a spread of Treasuries plus 185 bps.
The notes were guided in the Treasuries plus 190 bps area. Initial talk was set in the Treasuries plus 205 bps area.
A $2.5 billion tranche of 4.45% 10-year notes sold at 99.697 to yield 4.488%. The notes priced at Treasuries plus 205 bps, at the tight end of talk set in the Treasuries plus 210 bps area. Initial price thoughts were in the Treasuries plus 225 bps area.
The company also priced $750 million of 5.7% 20-year bonds at 99.558 to yield 5.738%, or Treasuries plus 255 bps.
Price guidance was in the Treasuries plus 260 bps area after having tightened from the Treasuries plus 280 bps to 285 bps range.
Finally, $2.25 billion of 5.85% 30-year bonds sold at 99.476 to yield 5.888%, or Treasuries plus 270 bps.
The bonds sold at the tight end of the Treasuries plus 275 bps area revised guidance. Initial talk was set in the 280 bps area over Treasuries.
A planned three-year floating-rate tranche was dropped prior to the deal’s launch.
Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Fifth Third Securities, Goldman Sachs & Co., Mizuho Securities, RBC Capital Markets LLC and Scotia Capital (USA) Inc. were the bookrunners.
Proceeds will be used to fund the company’s acquisition of Lorillard Inc.
Reynolds American is a Winston-Salem, N.C.-based manufacturer and seller of cigarettes and other tobacco products.
| Issuer: | Reynolds American Inc.
|
| Guarantors: | Santa Fe Natural Tobacco Co, Inc., Conwood Holdings, Inc., RAI Services Co., American Snuff Co. LLC, RJ Reynolds Tobacco Holdings Inc., RJ Reynolds Global Products, Inc., RJ Reynolds Tobacco Co., Reynolds Finance Co., Reynolds Innovations Inc., RJ Reynolds Tobacco Co.
|
| Issue: | Senior notes
|
| Amount: | $9 billion
|
| Bookrunners: | Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Fifth Third Securities, Goldman Sachs & Co., Mizuho Securities, RBC Capital Markets LLC, Scotia Capital (USA) Inc.
|
| Trade date: | June 9
|
| Settlement date: | June 12
|
| Change-of-control put: | 101%
|
| Ratings: | Moody’s: Baa3
|
| Standard & Poor’s: BBB-
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | June 12, 2018
|
| Coupon: | 2.3%
|
| Price: | 99.983
|
| Yield: | 2.306%
|
| Spread: | Treasuries plus 120 bps
|
| Price guidance: | Treasuries plus 125 bps area, revised from 130 bps area, tightened from 165 bps area
|
| Make-whole call: | Treasuries plus 20 bps
|
|
|
| Five-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | June 12, 2020
|
| Coupon: | 3.25%
|
| Price: | 99.982
|
| Yield: | 3.254%
|
| Spread: | Treasuries plus 150 bps
|
| Price guidance: | Treasuries plus 155 bps area, tightened from 185 bps area
|
| Make-whole call: | Treasuries plus 25 bps
|
|
|
| Seven-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 12, 2022
|
| Coupon: | 4%
|
| Price: | 99.861
|
| Yield: | 4.023%
|
| Spread: | Treasuries plus 185 bps
|
| Price guidance: | Treasuries plus 190 bps area, tightened from 205 bps area
|
| Make-whole call: | Treasuries plus 30 bps
|
|
|
| 10-year notes
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| Amount: | $2.5 billion
|
| Maturity: | June 12, 2025
|
| Coupon: | 4.45%
|
| Price: | 99.697
|
| Yield: | 4.488%
|
| Spread: | Treasuries plus 205 bps
|
| Price guidance: | Treasuries plus 210 bps area, tightened from 225 bps area
|
| Make-whole call: | Treasuries plus 30 bps
|
|
|
| 20-year bonds
|
| Amount: | $750 million
|
| Maturity: | Aug. 15, 2035
|
| Coupon: | 5.7%
|
| Price: | 99.558
|
| Yield: | 5.738%
|
| Spread: | Treasuries plus 255 bps
|
| Price guidance: | Treasuries plus 260 bps area, tightened from 280 bps to 285 bps
|
| Make-whole call: | Treasuries plus 40 bps
|
|
|
| 30-year bonds
|
| Amount: | $2.25 billion
|
| Maturity: | Aug. 15, 2045
|
| Coupon: | 5.85%
|
| Price: | 99.476
|
| Yield: | 5.888%
|
| Spread: | Treasuries plus 270 bps
|
| Price guidance: | Treasuries plus 275 bps area, revised from 280 bps area, tightened from 300 bps area
|
| Make-whole call: | Treasuries plus 45 bps
|
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