The processed and packaged food giant,
ConAgra Foods, Inc.
) recently raised funds from the market through issuance of
approximately $750 million principal amount of Senior Notes. The
whole process took place in three tranches of equal amount of $250
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Discussed in parts, the first lot comprised 1.35% of Senior Notes
due to mature on September 10, 2015. These notes are expected to
yield 1.425% at maturity and were offered at 99.781% of the
The second lot consisted of 2.10% of Senior Notes, maturing on
March 15, 2018. The notes were issued at 99.762% of the principal
amount and yield 2.146% on maturity. The third lot included 3.25%
of Senior Notes due to mature on September 15, 2022. The notes were
issued at 99.442% of the principal amount and yield 3.316% on
Moody's conferred a Baa2 rating to these notes while a BBB rating
was provided by both S&P and Fitch credit rating agencies, all
indicating a stable outlook. Interest payments will be made
semi-annually with the first payment due to mature on March 10,
2013, for the first tranche issue while on March 15, 2013, for the
second and third tranches.
ConAgra Foods estimates collection of approximately $743.3 million,
net of underwriting discounts from the notes offering, and intends
to use the proceeds for general corporate purposes and repayment of
$300 million of commercial papers.
For the fiscal year 2012 (ended May 27, 2012), the company had
Senior long-term debt balance of approximately $2,662.7 million and
Subordinated debt balance of $195.9 million.
The Zacks Consensus Estimate for the fiscal first quarter 2013 is
36 cents per share, up 22.9% year over year. Estimates for fiscal
2013 and 2014 stand at $1.98 and $2.12 per share, representing
year-over-year growth of 7.8% and 6.9%, respectively.
ConAgra Foods Inc. is one of North America's leading food
companies. We currently maintain a Neutral recommendation on
ConAgra. The stock also bears a Zacks #3 Rank, implying a
short-term Hold rating. Its prime competitors
HJ Heinz Co.
Kraft Foods Inc.
) also hold a Zacks #3 (Hold) Rank.