8-KOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Corporate Update (Nov 10, 2008)

Filed November 10, 2008For Securities:MO

Summary

Altria Group, Inc. (MO) filed an 8-K on November 10, 2008, to report on a significant debt issuance. The company successfully raised a total of $6.5 billion through the public offering of three series of senior unsecured notes: $1.4 billion in 8.50% Notes due 2013, $3.1 billion in 9.70% Notes due 2018, and $1.5 billion in 9.95% Notes due 2038. These notes are guaranteed by its wholly-owned subsidiary, Philip Morris USA Inc. (PM USA). The proceeds from this offering are intended to reduce existing credit facilities, specifically the company's 364-day bridge loan agreements. This strategic move to strengthen the balance sheet through capital markets financing occurred during a period of economic uncertainty. Investors should note the substantial amount raised and the long-term nature of some of the debt, indicating Altria's focus on liquidity and financial stability.

Key Highlights

  • 1Altria Group Inc. issued a total of $6.5 billion in senior unsecured notes across three tranches.
  • 2The notes issued are 8.50% Notes due 2013 ($1.4 billion), 9.70% Notes due 2018 ($3.1 billion), and 9.95% Notes due 2038 ($1.5 billion).
  • 3Philip Morris USA Inc. (PM USA) provided guarantees for all issued notes.
  • 4The offering was conducted through a Terms Agreement with several prominent underwriters, including Citigroup Global Markets Inc., Goldman, Sachs & Co., and J.P. Morgan Securities Inc.
  • 5The net proceeds from the note offering will be used to reduce commitments under existing 364-day bridge loan agreements.
  • 6Interest on the notes is payable semiannually.
  • 7The issuance comprises Altria's senior unsecured obligations, ranking equally with existing senior unsecured indebtedness.

Frequently Asked Questions

This 8-K filing is primarily to report on Altria Group, Inc.'s issuance of $6.5 billion in aggregate principal amount of senior unsecured notes to the public.

The net proceeds from the offering are intended to reduce commitments under Altria's existing 364-day bridge loan agreements, thereby strengthening its liquidity and financial flexibility.

No, the notes issued are senior unsecured obligations of Altria Group, Inc. They rank equally in right of payment with all of the company's existing and future senior unsecured indebtedness. The notes are guaranteed by PM USA, which are also senior unsecured obligations of PM USA.

The notes include $1.4 billion of 8.50% Notes due November 10, 2013, $3.1 billion of 9.70% Notes due November 10, 2018, and $1.5 billion of 9.95% Notes due November 10, 2038.