US cereal giant General Mills has launched a modified Dutch auction cash tender offer to buy back up to US$250m of its outstanding notes.

The company said yesterday (12 April) that it is making the offer for its 6% notes due in 2012 and its 5.65% notes, also due in 2012.

The company said that it will set the price, which remains to be determined, based on a mix of the yield and a bid spread range associated with the notes.

General Mills expects to use a combination of cash on hand and the proceeds from the issuance of commercial paper to fund the purchase.