Kellogg tenders for up to $440 million of 7.45% debentures due 2031

By Susanna Moon

Chicago, Feb. 25 – Kellogg Co. said it is tendering for up to $440 million principal amount of its $1.1 billion of 7.45% debentures due 2031.

Pricing will be set at 2 p.m. ET on March 9 using the yield to maturity of the 1.625% U.S. Treasury notes due Feb. 15, 2026 plus 275 basis points.

The hypothetical total purchase was set at $1,325.19 for each $1,000 principal amount using the bid-side price of the reference security at 2 p.m. ET on Feb. 24 and assuming an early settlement date of March 10.

The total payment will include an early tender premium of $30.00 for each $1,000 principal amount of notes tendered by 5 p.m. ET on March 9, the early tender date.

Those who tender after the early deadline will receive the total amount less the early premium.

The tender offer will run until 11:59 p.m. ET on March 23.

Tendered notes may be withdrawn by the early tender deadline.

The company also will pay accrued interest up to but excluding the settlement date, which will be March 10 for early tendered notes and March 24 for all other tenders.

If the offer is oversubscribed, the notes will be purchased on a prorated basis.

The tender offer is subject to a financing condition.

Kellogg plans to price senior notes in two tranches, with senior notes due 2026 and senior debentures due 2046, as reported by Prospect News.

The company said it reserves the right to waive the conditions to the offer; to extend, terminate or withdraw the tender offer; and to increase or decrease the maximum tender amount.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057), Barclays (800 438-3242 or 212 528-7581) and BofA Merrill Lynch (888 292-0070 or 980 387-3907) are the lead dealer managers. D.F. King & Co., Inc. (800 499-8159, 212 269-5550 or kelloggs@dfking.com) is the information agent.

The issuer is a maker of cereal and convenience foods based in Battle Creek, Mich.

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