US packaged food maker ConAgra Foods said yesterday (6 April) that it will sell US$1bn worth of senior notes in an underwritten public offering in order to refinance debt.

The offering will consist of $500m of 5.875% senior notes, due in April 2014, and $500m of 7% senior notes, due in April 2019.

ConAgra said it would buy up to $600m of its outstanding senior notes in cash tender offers.

“The rest of the proceeds will be used to repay other debt and also may be used for general corporate purposes, such as for contributions to its pension plans,” the company said in a regulatory filing. 

Moody’s Investors Service assigned “Baa2,” or investment grade, ratings to the notes and reaffirmed the company’s existing “Baa2” rating for senior unsecured debt.

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Moody’s said the affirmation of the company’s ratings is “based on our expectation that the proposed debt offering, combined with the tender offer, will improve the company’s liquidity profile and is not likely to materially increase overall financial leverage.”

ConAgra expects the offering to close on 14 April, subject to customary closing conditions.