Mars Inc, the iconic US confectioner behind brands like Skittles and M&Ms, is aiming to raise at least $1bn through a private debt sale as part of its financing strategy for the $36bn acquisition of foodmaker Kellanova, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as saying that the company is in discussions with institutional investors, including insurers and asset managers, who are likely to be interested in the high-grade debt. The details of the transaction remain private, and Mars has declined to comment.
The private debt offering will reportedly include securities with maturities of five, nine, and 14 years. Early pricing indications suggest that five-year bonds will be priced at spreads of 90-95 basis points over US Treasuries, while nine-year bonds are expected at 115-120 basis points over the same benchmark. Pricing for the 14-year bonds remains unclear.
The proceeds will refinance a portion of a $29bn bridge loan provided by Citigroup and JPMorgan Chase to facilitate the acquisition. The deal is expected to close in the first half of 2025, with both Citi and JPMorgan declining to comment.
Mars is also preparing to issue investment-grade bonds to further support the buyout. While an issuance in December is possible, it is more likely to materialise early next year, according to previous reports.
