Daimler Said to Offer Europe's First Corporate Bonds of 2016by
Daimler AG is set to reopen Europe’s corporate bond market with the first sale in 2016 by a non-financial company.
The Stuttgart, Germany-based automaker is offering three-year floating-rate notes as well as five-year and eight-year fixed-rate notes, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. The last investment-grade sale above 500 million euros ($540 million) was by Repsol SA on Dec. 9, according to data compiled by Bloomberg.
The manufacturer of Mercedes-Benz luxury autos was the sixth-biggest corporate issuer last year among investment-grade companies, according to data compiled by Bloomberg. Volkswagen AG led the charge, selling almost 11 billion euros of bonds, as companies took advantage of borrowing costs in euros that reached a record-low 0.9 percent in 2015, according to Bank of America Merrill Lynch index data. The yield was 1.42 percent on Monday.
“If this deal performs then it could send a green light to banks to bring more deals to the market,” said Mitch Reznick, co-head of credit at Hermes Investment Management, which oversees $31 billion. “Given that this is the first deal of the year in a volatile market, the signaling effect is probably more important than usual.”
Daimler’s most recent major sale of euro-denominated bonds was in October, when it sold 1 billion euros of debt maturing in March 2020.