Nike Inc. (NKE), the world’s largest sporting-goods company, boosted the industry’s biggest cash hoard by entering the bond market for the first time in a decade with a new $1 billion offering.
The athletic-footwear maker sold equal $500 million portions of 2.25 percent, 10-year debt and 30-year securities with a 3.625 percent coupon, the lowest among similar corporate bonds issued in the U.S. this year, according to data compiled by Bloomberg. The 2023 notes yield 58 basis points more than Treasuries, with the 2043 bonds paying a spread of 75.
Nike’s sale adds to the $4 billion of cash and marketable securities the company had on Feb. 28, Bloomberg data show. Proceeds from the offering may be used to fund capital expenditures, share buybacks or acquisitions, Beaverton, Oregon- based Nike said today in a regulatory filing. The issue is more than six times the $150 million of bonds previously outstanding.
The company last issued new debt in October 2003 with $100 million of 5.15 percent notes due 2015. Those securities traded at 110.4 cents on the dollar April 11 to yield 0.94 percent, or 70.5 basis points more than benchmarks, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Nike debt is rated A1 by Moody’s Investors Service and an equivalent A+ by Standard & Poor’s. Before today’s sale, the lowest coupon linked to 30-year, non-utility debt issued this year was 4 percent for Wal-Mart Stores Inc., Medtronic Inc. (MDT) and Anheuser-Busch InBev NV (ABI), Bloomberg data show.
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