(Bloomberg) — Mars Inc. is borrowing the equivalent of $1 billion through privately-placed bonds, people with knowledge of the matter said, as it begins to repay bank loans it took out to help buy foodmaker Kellanova.
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The high-grade private debt, denominated in sterling and dollars, was offered to institutional investors in tranches due in five, nine and 14 years, said the people, who declined to comment publicly as the matter is private.
Mars — known for brands like Skittles and M&Ms candies — is tapping the US private placement market ahead of a larger issue of public investment-grade bonds expected in coming weeks.
Citigroup Inc. and JPMorgan Chase & Co. arranged the transaction, the people added. Representatives for both banks declined to comment. A spokesperson at Mars didn’t respond to a request for comment.
The packaged food manufacturer in August inked a $29 billion bridge loan, with the aim to replace it with longer-term, less expensive corporate debt taking both private and public forms.
The US private placement market acts as an alternative funding route for blue-chip businesses beyond public credit markets and bank loans. Biotechnology company Thermo Fisher Scientific recently signed a deal to borrow 1.15 billion Swiss francs ($1.27 billion) from the market.
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