8-KOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Corporate Update (Aug 9, 2012)

Filed August 9, 2012For Securities:MO

Summary

On August 9, 2012, Altria Group, Inc. (MO) announced the issuance of $2.8 billion in aggregate principal amount of senior unsecured notes. This issuance includes $1.9 billion of 2.850% Notes due 2022 and $900 million of 4.250% Notes due 2042. These notes are senior obligations of Altria Group, Inc. and will rank equally with its existing and future senior unsecured indebtedness. The issuance is further strengthened by guarantees from its wholly-owned subsidiary, Philip Morris USA Inc. (PM USA), which will rank as PM USA's senior unsecured obligations. The offering was conducted under an Underwriting Agreement dated November 4, 2008, with a Terms Agreement entered into on August 6, 2012, involving Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and J.P. Morgan Securities LLC as underwriters. The funds raised from this offering will be utilized according to the terms specified in the prospectus and prospectus supplement filed with the SEC. Investors should note the semiannual interest payments and the respective maturity dates for each series of notes.

Key Highlights

  • 1Altria Group, Inc. issued $2.8 billion in senior unsecured notes: $1.9 billion in 2.850% Notes due 2022 and $900 million in 4.250% Notes due 2042.
  • 2The notes are senior unsecured obligations of Altria Group, Inc., ranking pari passu with existing and future senior unsecured debt.
  • 3Philip Morris USA Inc. (PM USA), a wholly-owned subsidiary, provided senior unsecured guarantees for both series of notes.
  • 4The issuance was underwritten by Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and J.P. Morgan Securities LLC.
  • 5Interest on the notes is payable semiannually on February 9 and August 9, commencing February 9, 2013.
  • 6The 2022 Notes mature on August 9, 2022, and the 2042 Notes mature on August 9, 2042.
  • 7The company filed a prospectus and prospectus supplement with the SEC regarding this public offering.

Frequently Asked Questions

The filing does not explicitly state the purpose of the debt issuance. However, proceeds from such offerings are typically used for general corporate purposes, refinancing existing debt, or funding strategic initiatives. Investors can refer to the prospectus and prospectus supplement for more detailed information.

The notes are senior unsecured obligations of Altria Group, Inc., meaning they rank below secured debt and senior debt that may be created in the future. The guarantees from PM USA add an additional layer of assurance, but are also senior unsecured obligations. Investors should consider Altria's overall financial health, cash flows, and the competitive landscape of the tobacco industry when assessing credit risk.

Both the 2022 Notes and the 2042 Notes are classified as senior unsecured obligations of Altria Group, Inc. This means they are on equal footing with all of Altria's other existing and future senior unsecured indebtedness, but they are subordinate to any secured debt.

Philip Morris USA Inc. (PM USA), a wholly-owned subsidiary of Altria, provided senior unsecured guarantees for both the 2022 Notes and the 2042 Notes. These guarantees make PM USA also liable for the payment of these notes, ranking equally with PM USA's other senior unsecured indebtedness.