Anglo American Sells Euro Bonds as Sales Climb to 8-Month HighJohn Glover
Anglo American Plc and Total SA are leading at least 8.8 billion euros ($12 billion) of bond sales in Europe’s busiest day for issuance since March 5.
Corporate treasurers are taking advantage of historically low borrowing costs. The extra yield investors demand to hold investment-grade bonds instead of government securities is 129 basis points compared with an average for the past five years of 212 basis points, according to Bank of America Merrill Lynch index data.
“We’re coming into the end of the year so if you need to issue you should really just get it done,” said Graham Neilson, a strategist at Cairn Capital in London, which manages about $10 billion. “There’s plenty of liquidity and spreads have definitely tightened.”
Anglo marketed 600 million euros of seven-year notes to yield 142 basis points more than the mid-swap rate and 900 million euros of four-year bonds at a spread of 97 basis points, according to a person with knowledge of the sale.
James Wyatt-Tilby, a spokesman for the London-based company, said proceeds from the bond sale will be used for general corporate purposes.
Paris-based Total issued 850 million euros of eight-year securities to yield 47 basis points more than the swap rate and 650 million euros of 12-year notes at a spread of 65 basis points, according to data compiled by Bloomberg.
Also in the market today, German luxury carmaker Daimler AG sold 1 billion euros of bonds maturing in November 2018 to yield 43 basis points more than swaps, a person familiar with the matter said.
Fincantieri SpA, an Italian shipbuilder based in Trieste, is issuing 300 million euros of five-year notes to yield 3.875 percent.
The cost of insuring investment-grade debt in euros climbed from a 3 1/2-year low, with the Markit iTraxx Europe index of credit-default swaps on 125 companies rising 1.4 basis points to 83 basis points at 2:55 p.m. in London.