Atlas Copco AB, the world’s largest maker of air compressors, sold its first bonds in five years as the prospect of Greece completing its debt swap helped buoy fixed-income markets.
The 500 million-euro ($662 million) issue of seven-year bonds for the Stockholm-based company was priced to yield 75 basis points more than the benchmark swap rate, according to data compiled by Bloomberg. That compares with an average spread of 111 basis points for securities in Bank of America Merrill Lynch’s EMU Industrials index.
Yields on corporate bonds have dropped to record lows as holders of about 60 percent of eligible Greek bonds agreed to participate in the sovereign restructuring that could ease Europe’s debt crisis. Euro-denominated non-financial company bonds yield 2.5 percent on average, down from 3.2 percent at the start of the year, Bank of America Merrill Lynch data show.
“The market is more positive about the Greek situation, and as spreads have improved it’s a good opportunity to raise funds,” said Juan Esteban Valencia, a credit strategist at Societe Generale SA in London.
Atlas Copco, rated A by Standard & Poor’s and one level lower at A3 by Moody’s Investors Service, has the equivalent of 1.65 billion euros of bonds outstanding, including 3 billion Swedish kroner ($446 million) of notes due in May.
The 2.625 percent coupon on the new notes is the lowest-ever for a seven-year corporate bond in euros, according to Deutsche Bank AG, which managed the offering with Nordea Markets and SEB AB.
“There is more positive sentiment today about the Greek debt swap than there was two days ago,” said Ken Lagerborg, group treasurer at Atlas Copco. “In the recent past, the market has been volatile and I don’t rule out that there will be some volatility going forward.”