Wrigley Raises $3 Billion in Bond Sale After Repaying BuffettCharles Mead
Mars Inc.’s Wm. Wrigley Jr. Co. unit raised $3 billion with a five-part bond offering after redeeming debt held by Warren Buffett’s Berkshire Hathaway Inc.
The maker of Juicy Fruit and Altoids sold $400 million each of 1.4 percent, three-year securities to yield 80 basis points more than similar-maturity Treasuries and 2 percent, four-year debt at a relative yield of 65 basis points, according to data compiled by Bloomberg.
It also issued $550 million of 2.4 percent, five-year notes at a 105 basis-point spread, $750 million of 2.9 percent, six- year debentures at 155 basis points and $900 million of 3.375 percent, seven-year bonds at 135.
Moody’s Investors Service last week raised the borrower’s credit rating to Baa2 from Ba1, citing in an Oct. 7 report the early redemption of $4.4 billion of 11.45 percent subordinated debt held by Berkshire.
The company is also seeking $2.65 billion of loans to refinance debt, according to a person with knowledge of the transaction, who asked not to be identified because the terms weren’t set. A $2.15 billion, five-year term loan is being offered at 1.25 percentage points more than the London interbank offered rate. The credit facility includes a $500 million unsecured revolving line of credit, also due in 2018.
Mars, which said earlier this month that it retired the bonds on Oct. 1, had turned to Buffett for help financing its $23 billion takeover of Wrigley in October 2008. Wrigley’s $500 million of 4.65 percent unsecured notes due July 2015 traded at 105.42 cents on the dollar on Aug. 23 to yield 1.71 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.