British American Tobacco has started marketing sterling and euro bonds to further finance its $49.4bn acquisition of Reynolds American.
The company has already issued the second-largest dollar-denominated bond of the year this week, borrowing $17.25bn to fund the deal. That transaction brought in $35bn of orders.
The cigarette maker is now selling three tranches of euro-denominated debt, ranging from four to 12.5 years in maturity, and one tranche of eight-year sterling debt. The shortest duration euro tranche is a floating-rate note.
The takeover, which was agreed upon in January, will create the world’s biggest listed tobacco company by sales.
The latest wave of European debt issuance will test investor appetite for the company, in light of regulatory pressures. British American Tobacco is currently under investigation from the Serious Fraud Office over claims that it bribed officials in east Africa.
The debt is rated BBB+ by S&P and Baa2 by Moody’s