Pepsi Raises $1.7 Billion in Fixed, Floating-Rate Bond Offering
PepsiCo Inc. (PEP), the world’s second-largest soft-drink maker, issued $1.7 billion of bonds in two parts in its second benchmark sale this year.
The beverage and snack seller sold $850 million each of two-year, floating-rate notes that yield 20 basis points more than the three-month London interbank offered rate, and 2.25 percent, 5.5-year debt at 90 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The bonds are rated A1 by Moody’s Investors Service.
PepsiCo opted against selling 5.5-year floating-rate notes, which it had considered issuing earlier today, according to a person with knowledge of the transaction who asked not to be identified without authorization to speak publicly.
The company issued $2.5 billion of debt in February in three parts including $625 million of 0.7 percent debentures due February 2016 at a spread of 35 basis points, Bloomberg data show. The bonds traded on July 19 at 99.55 cents on the dollar to yield 0.88 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Proceeds will be used for debt repayment and general corporate purposes, Bloomberg data show. Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley managed the offering for the Purchase, New York-based company. Benchmark sales are typically at least $500 million.
Coca-Cola Co. is the world’s biggest soft-drink maker.
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