Sherwin-Williams Sells $1 Billion of Bonds for Comex Purchase
Sherwin-Williams Co. (SHW), the paint retailer acquiring Consorcio Comex SA, sold $1 billion of bonds to help fund the purchase.
The company issued $700 million of 1.35 percent, five-year debentures to yield 75 basis points more than similar-maturity Treasuries and $300 million of 4 percent, 30-year securities at a relative yield of 125 basis points, according to data compiled by Bloomberg. The sale was marketed for $750 million earlier today.
Proceeds will also be used to repay borrowings under its domestic commercial paper program, which had about $95 million outstanding yesterday, the Cleveland, Ohio-based company said today in a regulatory filing.
The sale is Sherwin-Williams’s first since December 2009, when it issued $500 million of 3.125 percent, five-year debentures at a spread of 82 basis points, Bloomberg data show. The bonds traded at 104.9 cents on the dollar to yield 0.73 percent on Nov. 27, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Sherwin-Williams is adding to the company’s 3,500 North American stores after an improving housing market led to record earnings in the third quarter. Comex, which has exclusive sales to 3,300 paint stores in Mexico, generated 66 percent of its $1.4 billion of revenue last year in Latin America, Sherwin- Williams said in a Nov. 12 presentation.
The new bonds are rated A3 by Moody’s Investors Service, the ratings company said today in a release. Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. managed the sale, Bloomberg data show.
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