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Nov. 3 (Bloomberg) -- Colgate-Palmolive Co. plans to sell $1 billion of notes as soon as today in its biggest-ever bond offering, according to a person with knowledge of the transaction.
The world’s largest toothpaste maker is marketing $300 million of three-year notes, $400 million of five-year debt and $300 million of 10-year debentures, said the person, who declined to be identified because terms aren’t set. Proceeds may be used by the New York-based company to repay debt, including short-term IOUs, the person said.
Colgate-Palmolive is tapping the corporate bond market for the second time this year, taking advantage of plunging borrowing costs for investment-grade companies as investors gain confidence the U.S. economy is finding its footing. The extra yield investors demand to own the debt instead of similar- maturity Treasuries narrowed last month by the most since July 2009 on growing optimism that Europe’s sovereign-debt crisis would be contained.
Citigroup Inc., BNP Paribas SA, Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co. and Morgan Stanley are managing the offering, the person said.
Colgate-Palmolive, rated Aa3 by Moody’s Investors Service and an equivalent AA- by Standard & Poor’s, last sold bonds in April, when it issued $250 million of three-year, 1.25 percent notes and an equal amount of six-year, 2.625 percent debt, according to data compiled by Bloomberg.
Yields on investment-grade corporate debt fell to 3.7 percent yesterday from 4.15 percent on Oct. 11, the highest in more than six months, according to Bank of America Merrill Lynch index data. Spreads on the debt narrowed 35 basis points, or 0.35 percentage point in October, the index data show
--With assistance from James Holloway in New York. Editors: Pierre Paulden, Chapin Wright
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