Unilever Almost Borrowing for Free Following ECB Bond-Buying Plans
April 25 2016 - 8:51AM
Dow Jones News
By Christopher Whittall
Consumer-goods giant Unilever NV was set to raise money in bond
markets Monday that will cost them almost nothing, in the latest
sign of how the European Central Bank's stimulus measures are
slashing funding costs across the continent.
In one tranche of a EUR1.5 billion ($1.68 billion) deal, the
Anglo-Dutch company was set to sell EUR300 million of debt maturing
in 2020 with a coupon of 0%, potentially offering investors a yield
of just 0.06%, according to deal guidance released Monday by
underwriting banks.
The Unilever bonds will be one of the lowest-yielding euro debt
sales on record, and one of the first since the ECB released
details on Thursday of its plans to start buying corporate bonds in
June.
Borrowing costs for major European corporations have dropped
sharply since the ECB said in March it planned to start buying
nonbank euro-denominated corporate debt later this year.
Banks handling the Unilever deal have received orders of around
EUR4 billion from investors for the debt sale, which also included
eight-year and 12-year bonds, according to the deal notice. The
eight-year bonds are expected to offer a yield of around 0.66%,
while the 12-year bonds are expected to offer a yield of around
1.18%, according to a person familiar with the deal. Both these
bonds will have positive coupons.
The bonds will price later Monday. Citigroup Inc., Deutsche Bank
AG, HSBC PLC and Banco Santander SA are underwriting the deal.
Write to Christopher Whittall at
christopher.whittall@wsj.com
(END) Dow Jones Newswires
April 25, 2016 08:36 ET (12:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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