{"id":1202,"date":"2023-10-13T20:05:02","date_gmt":"2023-10-13T20:05:02","guid":{"rendered":"https:\/\/infundpros.com\/investment\/j-m-smucker-taps-corporate-bond-market-to-fund-cash-portion-of-hostess-brands-deal\/"},"modified":"2023-10-13T20:05:03","modified_gmt":"2023-10-13T20:05:03","slug":"j-m-smucker-taps-corporate-bond-market-to-fund-cash-portion-of-hostess-brands-deal","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=1202","title":{"rendered":"J.M. Smucker taps corporate bond market to fund cash portion of Hostess Brands deal"},"content":{"rendered":"
\n

J.M. Smucker Co. is tapping the investment-grade corporate bond market on Wednesday with a deal to finance its acquisition of Twinkies and HoHos maker Hostess Brands Inc.<\/p>\n

The parent to food brands including Folgers, Smuckers and Meow Mix
\n SJM,
\n +1.59%<\/bg-quote>
\n announced the $5.6 billion cash-and-stock deal in September.<\/p>\n

\n

The company is planning a four-tranche deal, according to a regulatory filing, comprised of five-year, 10-year, 20-year and 30-year fixed rate notes, according to market sources. Smucker is rated Baa3 by Moody\u2019s and BBB by S&P Global Ratings. <\/p>\n

Proceeds of the deal will be used to fund the cash consideration of the deal, to repay debt of Hostess Brands
\n TWNK,
\n +0.18%<\/bg-quote>
\n and its units and to pay fees relating to the deal. <\/p>\n

The company will pay Hostess shareholders $30.00 in cash and 0.03002 J.M. Smucker shares for each Hostess share they own. That valued Hostess shares at $34.25 each, or a 21.8% premium over the prior session\u2019s closing price when the deal was announced.<\/p>\n

As the following charts from data solutions company BondCliQ Media Services show, Smucker\u2019s bonds have been popular in the last 10 days with better net buying across all maturities.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n
<\/div>\n<\/figure><\/div>\n

The next chart shows the company\u2019s maturity stack with $1 billion of bonds coming due in 2025.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n
\n \"\"\n <\/div>\n<\/figure><\/div>\n

Spreads on the company\u2019s existing bonds are holding steady to a few basis points wider on Wednesday. The company\u2019s 4.25% notes that mature in 2035 widened by about 20 basis points when the deal was first announced on Sept. 11.<\/p>\n

The stock, meanwhile, was down 1.3% Wednesday, and has fallen 28% in the year to date, while the S&P 500
\n SPX
\n has gained 13.6%. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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