Monsanto Co. (MON), a Missouri-based agricultural biotechnology
company, broke the record for lowest-ever coupon on a 30-year bond
Monday as seven high-grade companies took advantage of a hungry
buyer base.
The range of deals, including multi-billion dollar offerings
from Takeda Pharmaceutical Co. (TKPYY, 4502.TO) and America Movil
SAB de CV (AMOV, AMX.MX), follow a sleepy holiday-shortened week
when less than $1 billion was priced, according to Dealogic.
Syndicate desks are expecting $20 billion or more this week, with
Monday's tally being at least $6.8 billion.
Monsanto sold $250 million of 3.60% coupon bonds at a yield of
3.608%, or 1.0 percentage point more than the 30-year Treasury
yield. That beat the prior record-low of 3.70% set by McDonalds
Corp. (MCD) on Feb. 2, according to Dealogic, whose records go back
to 1995.
Monsanto also sold $250 million of 10-year bonds with a coupon
of 2.20%, marking the second-lowest coupon in Dealogic records.
They were priced to yield 2.213%, or 0.70 percentage point more
than Treasurys. 3M Co. (MMM) maintains the record-low from its 2%
coupon 10-year sale on June 21.
The deals are coming in the face of a weakening secondary market
and a minor selloff in equities, but average corporate bond yields
have never been lower, according to Barclays. Its index of
high-grade bond yields finished last week at 3.18%, once again a
record-low in four decades of data. The low yields--led by a rally
in Treasurys, which corporate bonds are harnessed to--and the
dearth of issuance last week are making it an ideal time to
borrow.
Takeda, Japan's largest drug maker by sales, plans to sell a $3
billion bond deal evenly split between three- and five-year
maturities.
The three-year dollar bond will offer investors 68 basis points
over comparable Treasurys, and the five-year tranche will offer 100
basis points over comparable Treasurys, according to a person
familiar with the matter.
Takeda plans to use proceeds from its benchmark-sized deal to
repay debt from its acquisition of Nycomed SCA last year. It has
spent nearly $15 billion in overseas acquisitions in the past two
years to overcome expiring patents and a lackluster home market,
according to a May 25 Dow Jones article.
America Movil SAB de CV, a wireless services provider in Latin
America, is selling a $2 billion deal. At launch, it planned to
sell $1.25 billion of 10-year bonds with a yield of 1.68 percentage
points over Treasurys, and $750 million of 30-year bonds with a
yield 1.88 points over Treasurys.
Also on the docket are Japanese auto maker Mitsubishi Corp.
(MSBHY), Korea East-West Power Co., and Boston-based materials
company Cabot Corp. (CBT).
Cabot is selling $600 million in 5.5-year and 10-year maturities
to help finance its $1.1 billion acquisition of Norit, a Dutch
maker of carbons.
Lastly, Icahn Enterprises L.P. (IEP) is adding $200 million to
an outstanding deal of bonds due in 2018.
Write to Patrick McGee at patrick.mcgee@dowjones.com