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MINNEAPOLIS, MN – General Mills , Inc. has announced the sale of €750 million in aggregate principal amount of 3.600% notes due in 2032, in a transaction set to close today, subject to customary closing conditions. This move comes as part of the company’s broader capital management strategy, adding to its existing total debt of $14.19 billion. According to InvestingPro data, the company’s current ratio of 0.67 indicates that short-term obligations exceed liquid assets, suggesting this debt issuance could help address liquidity needs.
The notes were sold pursuant to an Underwriting Agreement dated Sunday, with Deutsche Bank AG (ETR:DBKGn), London Branch, Merrill Lynch International, Morgan Stanley (NYSE:MS) & Co. International plc, and several other underwriters. The issuance is in accordance with an Indenture dated February 1, 1996, as amended, between General Mills and U.S. Bank Trust Company, National Association, as Trustee.
The offering and sale of the notes have been registered under the Securities Act of 1933, by a Registration Statement on Form S-3. The Officers’ Certificate and Authentication Order, which provides the specifics of the notes, was dated today.
General Mills, a leading global food company with a market capitalization of $30.92 billion, is known for its wide range of products, including cereals, snacks, and convenient meals. The company’s decision to issue debt in the form of notes is a common financial strategy for raising capital. The funds raised may be used for various corporate purposes, which could include refinancing existing debt, funding capital expenditures, or pursuing strategic investments. Currently trading near its 52-week low at $56.47, the stock offers a notable dividend yield of 4.25%, backed by an impressive 55-year streak of consecutive dividend payments. InvestingPro analysis reveals 8 additional key insights about General Mills’ financial health and growth prospects, available in the comprehensive Pro Research Report.
Investors often view such financial instruments as a way to gain exposure to a company’s credit risk, while potentially receiving a steady stream of income through interest payments. The interest rate of 3.600% for these notes reflects the cost to General Mills for borrowing funds through this debt issuance.
The details of the offering are outlined in the Underwriting Agreement and the Officers’ Certificate, and the validity of the notes has been confirmed by the legal opinion of Faegre Drinker Biddle & Reath LLP.
The information regarding this financial event is based on a press release statement. It is noteworthy that the financial markets, including New York Stock Exchange, where General Mills’ common stock (NYSE:GIS) and other securities are traded, closely monitor such corporate activities for their potential impact on the markets and individual securities.
In other recent news, General Mills has faced several adjustments in analyst ratings and price targets following its latest financial disclosures. The company reported a miss in third-quarter sales and issued a lower earnings per share (EPS) guidance for fiscal year 2025, prompting TD Cowen to reduce its price target to $57 while maintaining a Hold rating. RBC Capital Markets also lowered its price target to $67, citing challenges within the packaged food sector and a notable reduction in EPS projections. Similarly, Bernstein adjusted its price target to $62, maintaining a Market Perform rating due to evolving consumer behaviors impacting sales.
Jefferies revised its price target for General Mills to $59, maintaining a Hold rating, and highlighted broader challenges in the food sector affecting the company’s market strategies. Morgan Stanley initiated coverage with an underweight rating and a price target of $53, expressing concerns about General Mills’ North American sales and pricing power. Analysts noted that the company’s efforts to recalibrate pricing strategies might face challenges due to shifting consumer dynamics and increased competition. These developments reflect a cautious outlook from analysts, considering the company’s ongoing strategic investments and market conditions.
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