2nd UPDATE: High-Grade Corporate Borrowers Rush Back To Bond Market
03 Novembro 2011 - 8:13PM
Dow Jones News
Corporate borrowers returned to the debt markets in droves
Thursday, offering nearly $12 billion of new investment-grade bonds
in a window between volatility earlier this week and an expected
gusher of issuance next week.
The daily tally of $11.65 billion made it the 10th-biggest day
for high-grade corporate debt by volume so far this year, according
to data provider Dealogic.
Leading the charge was unit of mining company Xstrata Plc
(XTA.LN) with a four-part, $3 billion deal; Cigna Corp. (CI), with
a three-part $2.1 billion deal to help fund its $3.8 billion
acquisition of HealthSpring Inc. (HS); and medical devices maker
Becton, Dickinson & Co. (BDX), with $1.5 billion in five- and
10-year senior notes.
Also in the market were toothpaste and cosmetics maker
Colgate-Palmolive Co. (CL), with $1 billion in three-, five- and
10-year bonds; and toy maker Mattel Inc. (MAT) with a $600 million,
two-part deal to help fund its $680 million acquisition of HiT
Entertainment from a consortium led by Apax Partners funds.
Demand was strong because money managers have lots of cash on
hand and are under pressure to put it to work in investments that
earn decent returns but are still safe. Issuers, meanwhile, are
eager to borrow while rates are still low and investors view bonds
as a safer alternative to unpredictable stocks and other volatile
assets.
"Today's deal flow relates to the expiry of Sept. 30 [earnings]
blackout periods, several M&A-oriented financings, a growing
recognition that the interest rate opportunity is, indeed,
perishable, and the fact that next week is expected to be
exceptionally busy as well," said Bryan Jennings, head of
fixed-income capital markets in the Americas at Morgan Stanley,
which is leading deals for Cigna, Becton Dickinson,
Colgate-Palmolive, Mattel and Boston Properties, alongside other
firms.
Issuance exploded last week after European policy makers
unveiled a rescue deal for Greece, but optimism about the viability
of that plan soon faded. Corporate borrowers sold $13.7 billion of
bonds last Thursday, Oct. 27, alone, according to data provider
Dealogic, in an end-of-month burst that brought the monthly total
to $45.2 billion.
Issuance levels "experienced a resurrection at the end of
October as spreads narrowed sharply and yields fell on hopes of a
resolution of the European sovereign crisis," David Munves,
divisional managing director at Moody's Capital Markets Research
Inc., wrote in a note Thursday.
Other recent big-volume days for corporate debt sales include
$7.4 billion on Oct. 12 and $12.3 billion on Sept. 14, Dealogic
data show.
In addition to the offerings from Xstrata, Cigna, Becton
Dickinson, Colgate and Mattel, there were a $1.85 billion sale for
Toronto-Dominion Bank (TD); a $500 million, 10-year deal for
privately held food and agricultural products maker Cargill Inc.;
an $850 million sale of seven-year debt for the commercial
real-estate company Boston Properties Inc. (BXP), increased from a
planned $400 million; and a $250 million deal for Tucson Electric
Power Co., a unit of UniSource Energy Corp. (UNS).
-By Katy Burne, Dow Jones Newswires; 212-416-3084;
katy.burne@dowjones.com
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