UPDATE: BAT Sets Guidance On 2-Part Euro, Sterling Bond Issue

25th Jun 2010 13:44

(Adds comment, background) By Art Patnaude Of DOW JONES NEWSWIRES LONDON (Dow Jones)--British American Tobacco (BATS.LN) has set price guidance on its two-part, euro- and sterling-denominated bond issue, one of the banks running the sale said Friday. The EUR600 million, 10-year bond is to price at 115 basis points over midswaps, which looks attractive compared with its outstanding bonds, said LBBW in a note to investors. LBBW said the spread premium indicated is well below the current rating on the company. BAT brought the deal just one day after France-based utility group Veolia Environnement S.A. (VIE.FR) offered to exchange up to EUR1 billion of its existing bonds for new longer dated notes and launched a separate cash tender. Meanwhile, BAT's 30-year, GBP275 million, sterling bond is set to price at 155 basis points over gilts. BNP Paribas SA, Deutsche Bank AG, HSBC Holdings PLC, JPMorgan Chase & Co. and Lloyds TSB Bank PLC are lead managers on the BAT deal. The issue follows the completion of a recent tender offer by BAT, which is rated Baa1 by Moody's Investors Service Inc. and BBB+ by Standard & Poor's Corp. and Fitch Ratings. -By Art Patnaude, Dow Jones Newswires; +44 (0) 207 842 9259; [email protected] (END) Dow Jones Newswires June 25, 2010 08:44 ET (12:44 GMT)