Sara Lee Corp. plans to sell $800 million of 5- and 10-year debt as soon as today as it seeks to repay notes maturing next year.
The 5-year notes may yield about 140 basis points more than similar-maturity Treasuries, and the 10-year debt may pay a spread of about 160 basis points, according to a person familiar with the transaction. Proceeds will be used with cash on hand and commercial paper issuance to help fund a tender offer for notes due in 2011, the company said today in a prospectus that didn't specify the size, timing or maturity of the new debt.
Sara Lee is tapping the U.S. corporate bond market for the first time since 2003, when it issued $1 billion of notes, according to data compiled by Bloomberg. The Downers Grove-based company gave a 2011 earnings forecast on Aug. 12 that trailed some analysts' estimates. Sara Lee is vying with other foodmakers for sales as consumers maintain tightened budgets, with the U.S. slump abating less quickly than economists estimated.
Confidence among consumers, whose spending accounts for about 70 percent of the U.S. economy, rose less than forecast in August from an eight-month low.
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