Content area
Full text
Nestle performed the latest step in its acquisition financing dance on Monday, with a deft EUR 850m 10 year bond that came at an extremely fine spread over mid-swaps, yet left investors wanting more.
With a book of about [Euro] 2.4bn from 243 investors, Bank of America Merrill Lynch, BNP Paribas, HSBC and Royal Bank of Scotland priced the deal for the Aa2/AA rated issuer that has been called "pretty much the best credit in corporate Europe" at 15bp over mid-swaps. Bankers away from the deal said that was a new issue premium of 5bp or less.
The Swiss foods group's $11.85bn agreed bid for Pfizer's baby food arm has led to a light flurry of bond issues since it was announced in April, but the company has kept investors -- and its own banks -- guessing as to how much debt it will raise and from what sources. Monday's deal was mandated only late on Friday.
"They're being very intelligent in the way they're approaching the market," said a banker away from today's issue. "The Novartis and Roche [acquisition finance] deals came at much more difficult times, but they paid hundreds of basis points of new issue premium. Jumbo trades like those are exciting but they may not make economic sense."
In February...