British American Tobacco Plc sold the second-largest bond deal of the year to finance its purchase of the portion of Reynolds American Inc. that it didn't already own.
BAT sold $17.25 billion of dollar-denominated debt in eight parts, the longest of which is a 4.54% 30-year security that yields 1.7 percentage points more than Treasuries. That's down from initial talk between 1.8 percentage points to 1.85 percentage points, according to a person with knowledge of the matter, who asked not to be named because the deal is private.
The proceeds will help permanently finance BAT's 42 billion-pound ($55 billion) purchase of the remaining shares of Reynolds, a deal that will propel BAT to the top position in tobacco-related products globally. The sale is one step in London-based BAT's efforts to raise $25 billion for the deal. It is hoping to sell euro and pound-denominated debt as well. AT&T Inc. sold $22.5 billion of bonds two weeks ago that is the year's biggest U.S. dollar offering.
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