8-KOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Corporate Update (Feb 9, 2009)

Filed February 9, 2009For Securities:MO

Summary

Altria Group, Inc. (MO) filed a Form 8-K on February 9, 2009, reporting on a significant debt issuance that occurred on February 3, 2009. The company successfully issued an aggregate of $3.925 billion in senior unsecured notes across three tranches: $525 million in 7.75% Notes due 2014, $2.2 billion in 9.25% Notes due 2019, and $1.5 billion in 10.20% Notes due 2039. These notes are guaranteed by its wholly-owned subsidiary, Philip Morris USA Inc. (PM USA), providing an additional layer of credit assurance for investors.

Key Highlights

  • 1Altria Group Inc. issued $3.925 billion in senior unsecured notes on February 3, 2009.
  • 2The notes are structured in three series: 7.75% Notes due 2014 ($525M), 9.25% Notes due 2019 ($2.2B), and 10.20% Notes due 2039 ($1.5B).
  • 3Philip Morris USA Inc. (PM USA) provided guarantees for all three series of notes.
  • 4The net proceeds from the note offering, totaling approximately $4.189 billion, were used to fully repay outstanding borrowings under Altria's 364-Day Bridge Loan Agreement, which was then terminated.
  • 5The notes are general senior unsecured obligations of Altria, ranking equally with existing and future senior unsecured debt.
  • 6Interest payments on the notes are semi-annual, due on February 6 and August 6 each year, commencing August 6, 2009.

Frequently Asked Questions

The primary purpose of this debt issuance was to raise capital and concurrently repay Altria's outstanding borrowings under its 364-Day Bridge Loan Agreement, which was then terminated. This move effectively refinanced short-term debt with longer-term notes.

Altria Group issued a total of $3.925 billion in aggregate principal amount of notes. The terms include $525 million of 7.75% Notes due 2014, $2.2 billion of 9.25% Notes due 2019, and $1.5 billion of 10.20% Notes due 2039. Interest is payable semi-annually.

The notes are senior unsecured obligations of Altria Group, Inc. They are guaranteed by its wholly-owned subsidiary, Philip Morris USA Inc. (PM USA), which means PM USA also has senior unsecured obligations related to these notes.

The net proceeds from this offering, along with available cash, were used to fully prepay and terminate the company's 364-Day Bridge Loan Agreement. This indicates a strategic shift from short-term borrowing to longer-term debt financing.