Bloomberg News

Carrefour Sells Its First Bonds in a Year Amid Crisis Optimism

October 14, 2011

(See {EXT4 <GO>} for more on Europe’s debt crisis and {GM <GO>} for G-20 meeting.)

Oct. 14 (Bloomberg) -- Carrefour SA, the second-biggest retailer, is selling its first benchmark bond in more than a year as optimism policy makers will get to grips with the European crisis spurred issuance.

Carrefour is selling bonds due 2018 that may be priced to yield about 250 basis points more than the swap rate, according to a banker involved in the deal, who declined to be identified because the transaction is private. It’s the French supermarket’s first benchmark issue since it sold 1 billion euros ($1.4 billion) of 2021 bonds last July, according to data compiled by Bloomberg.

Optimism that finance ministers and central bankers from the Group of 20 will come up with what they call a “durable” solution to the euro-region crisis at an Oct. 23 summit encouraged companies including Iberdrola SA and Telecom Italia SpA to sell bonds this week. Borrowing costs tumbled, with the extra yield investors demand to hold European corporate notes rather than benchmark government debt dropping 18 basis points to 186, Bank of America Merrill Lynch index data show.

“With roughly another week to go to the summit, we think there are probably two or three active days before the market will slow down and get ready for the 23rd,” Anke Richter, a strategist at Mizuho International Plc in London, wrote in a note to investors.

Carrefour’s 3.875 percent senior unsecured bonds due April 2021 fell 2 percent to 90.4 cents on the euro after the company cut its 2011 profit forecast for the second time in three months yesterday. The securities, sold on July 22, 2010, have plunged 7 percent in the past three weeks, according to Bloomberg Bond Trader prices.

Banca IMI SpA, Barclays Capital, Credit Agricole CIB, ING Groep NV, Natixis and Royal Bank of Scotland Group Plc are managing the French retailer’s new deal, said the banker involved in the offering.

--Editors: Paul Armstrong, Cecile Gutscher

To contact the reporter on this story: Ben Martin in London at bmartin38@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net


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