Bloomberg News

British American Tobacco Sells Its First Bonds in 16 Months

November 02, 2011

(Updates to show bond is priced from first paragraph.)

Nov. 2 (Bloomberg) -- British American Tobacco Plc, Europe’s largest cigarette maker, raised 600 million euros ($828 million) from its first bond sale in 16 months.

The 10-year securities were priced to yield 123 basis points more than the benchmark swap rate, according to a banker with knowledge of the transaction. That compares with a spread of 105 basis points that investors demand to hold the London- based company’s 4 percent bonds due 2020 it issued in June last year, Bloomberg Bond Trader prices show.

The maker of Lucky Strike and Pall Mall cigarettes sold bonds as European leaders hold emergency talks to ensure their week-old strategy to combat the region’s debt crisis doesn’t unwind. Greek Prime Minister George Papandreou rattled markets after announcing a parliamentary confidence vote and his desire for a referendum on the bailout plan for his country.

“Given market uncertainty it is prudent to consider issuing some longer-term debt when the window of opportunity presents itself to pre-fund 2012,” Catherine Armstrong, a London-based spokeswoman for BAT, said in an e-mailed statement. “We intend to take advantage of any windows of opportunity in November to access the markets, but as our ability to access the market is headline and sentiment driven, timing is uncertain.”

Barclays Capital, Citigroup Inc., ING Groep NV and Royal Bank of Scotland Group Plc managed the sale. The notes were issued by B.A.T. International Finance Plc.

The tobacco company said investor demand was for bonds with maturities in the 2018 to 2022 areas.

--Editors: Andrew Reierson, Michael Shanahan

To contact the reporter on this story: Hannah Benjamin in London at hbenjamin1@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus