Heinz increases bond size, tightens pricing

Fri Mar 22, 2013 9:07am EDT

March 22 (IFR) - Ketchup giant H.J. Heinz increased the size of its high-yield bond sale and tightened price guidance Friday, indicating strong demand for the deal to help fund its $28 billion acquisition by Warren Buffett's Berkshire Hathaway and 3G Capital.

The company is now planning to issue $3.1 billion of second-lien notes, up from $2.1 billion. The bonds were originally intended to refinance a second-lien bridge loan.

Price talk on the notes has been revised to 4.25% from 4.50% area on Thursday and original thoughts of 5.75%.

Investors said the B1/BB- rated bond issue, which will price later on Friday, has been a blowout, with reports late Thursday that the order book was above $10 billion.

Wells Fargo, JP Morgan, Barclays and Citigroup are joint books on the deal.

Berkshire and Brazilian private equity firm 3G are buying Heinz for $72.50 a share, using a combination of loans, equity and bonds to finance the acquisition.