Unilever Sells First Euro Notes Since 2008 as Yields Decline
Unilever NV priced 750 million euros ($997 million) of seven-year bonds to yield 25 basis points more than the benchmark mid-swap rate, according to a person familiar with the matter, who asked not to be identified because the details are private. The average yield for investment-grade bonds in euros fell to 2.02 percent, approaching the four-week low of 1.95 percent reached on July 22, Bloomberg index data show.
The Anglo-Dutch company’s last sale of notes in euros matured in May, according to data compiled by Bloomberg. The 750 million euros of five-year securities were priced to yield 48 basis points more than the swap rate in 2008. German residential landlord TAG Immobilien AG (TEG) and Gruppo Cogemat SpA are also marketing bonds in the single currency as policy makers at central banks from Europe to the U.S. meet this week.
“Unilever is taking the opportunity to issue before the quiet August season and demand is driven by investors looking to get a bit more yield than they receive from cash in a relatively safe and quality asset,” said Suki Mann, a London-based strategist at Societe Generale SA. “This week is very important as central bank rhetoric might set the tone for bond markets in August.”
The 1.75 percent notes due August 2020 will be guaranteed by Unilever Plc and Unilever United States Inc., the company said in an e-mailed statement today. The proceeds of the bond will be used to refinance existing debt, another person familiar with the matter said.
The average yield premium investors demand for investment-grade euro-denominated bonds over the benchmark mid-swap rate fell 1 basis point to 97.8 basis points, according to Bloomberg index data.
In the high-yield market today, TAG Immobilien plans to issue as much as 200 million euros of five-year bonds, according to a person with knowledge of the sale. The notes are being offered to investors to yield about 5.25 percent, the person said.
Cabot Credit Management, a Kent, England-based buyer of consumer debt, is selling 100 million pounds ($154 million) of bonds to repay senior facilities and to help repay shareholder loans, said another person familiar with the matter. The seven-year notes are being offered to investors to yield about 8.5 percent and will be issued by Cabot Financial (Luxembourg) SA, the person said.
The notes, which the company can buy back after three years, are expected to be rated B1 by Moody’s Investors Service, four levels below investment grade, the person said.
Gruppo Cogemat, an Italian gaming machines operator, is meeting investors from tomorrow for a sale of 165 million euros of five-year bonds, according to a person familiar with the plan. The notes, which are expected to be rated B by Standard & Poor’s, five levels below investment grade, will be used to refinance debt, pay a dividend and for general corporate purposes, the person said. Cogemat SpA and Cogetech SpA are guaranteeing the bonds.