Bloomberg News

Coca-Cola Sells $2.5 Billion With First Debt in About a Year

February 28, 2013

Coca-Cola Co. (KO:US), the world’s largest soft-drink maker, sold $2.5 billion of bonds in its first offering in almost a year.

The producer of Sprite and Dasani water issued $500 million of floating-rate debt maturing in two years to yield 2 basis points less than the three-month London interbank offered rate, according to data compiled by Bloomberg. It also sold $1.25 billion of 1.15 percent, five year-debt to yield 45 basis points more than similar-maturity Treasuries and $750 million of 2.5 percent, 10-year bonds at a relative yield of 67 basis points.

The bonds are rated Aa3 by Moody’s Investors Service, AA- by Standard & Poor’s and A+ by Fitch Ratings, the ratings companies said today in separate statements.

Proceeds will be used to redeem all of the company’s 5 percent notes due in August, 7.375 percent securities maturing in 2014 and 4.25 percent debentures due 2015, as well as for general corporate purposes, the Atlanta-based beverages maker said today in a regulatory filing.

The sale follows a $2.5 billion issue from PepsiCo Inc. (PEP:US) on Feb. 25, in which the world’s largest snack-food maker sold $1.25 billion of 10-year debt yielding 2.76 percent, 21 basis points above the 2.55 percent yield on Coca-Cola’s April 2023 debt issued today, Bloomberg data show. Moody’s rates the PepsiCo bond Aa3, the same as the Coca-Cola issue. S&P grades PepsiCo’s securities at A-, or three levels lower.

Prior Sale

Coca-Cola previously sold debt in March 2012, issuing $1 billion each of two-year floaters to yield 5 basis points less than Libor and 0.75 percent, three-year securities to yield 35 basis points more than similar-maturity Treasuries, Bloomberg data show.

The bonds due in March 2015 traded at 100.8 cents on the dollar to yield 0.36 percent, or a 12.2 basis-point spread, yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

BNP Paribas SA, Citigroup Inc., Credit Suisse Group AG and Morgan Stanley managed today’s offering, Bloomberg data show.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net


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Companies Mentioned

  • KO
    (Coca-Cola Co/The)
    • $44.5 USD
    • 0.25
    • 0.56%
  • PEP
    (PepsiCo Inc)
    • $98.89 USD
    • 0.83
    • 0.84%
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