Bloomberg News

Ecolab, CIBC Sell Bonds in U.S. as Sales Rise to Four-Week High

December 06, 2011

Dec. 5 (Bloomberg) -- Ecolab Inc. and Canadian Imperial Bank of Commerce led at least $11.2 billion of corporate bond offerings in the U.S., the most in four weeks, as confidence grew that Europe’s debt crisis may be contained.

Ecolab, the largest maker of cleaning chemicals for hotels and restaurants, sold $3.75 billion of notes in a four-part offering, according to Bloomberg data. Toronto-based CIBC issued $2 billion of three-year, 1.5 percent covered bonds in the largest offering of the debt since Oct. 28, Bloomberg data show.

Wells Fargo & Co., Duke Energy Corp. and Ford Motor Credit Co. also tapped the corporate bond market as French President Nicolas Sarkozy and German Chancellor Angela Merkel pushed for a rewrite of the European Union’s governing rules to bolster economic cooperation while Italian Prime Minister Mario Monti prepared a 30 billion-euro ($40 billion) plan to reduce the region’s second-biggest debt.

“We had gotten some potentially positive news coming out of Italy and that’s provided a big boost,” Timothy Cox, managing director of debt capital markets at Mizuho Securities USA Inc. in New York, said in a telephone interview. “Getting a couple of days of better sentiment under our belts helped.”

A benchmark gauge of U.S. credit risk declined for a sixth straight day after falling last week by the most since March 2009. The Markit CDX North America Investment Grade Index decreased by 2.2 basis points to a mid-price of 123.4 basis points at 5:05 p.m. in New York, according to Markit Group Ltd. The measure pared its decline after dropping as much as 5.7 basis points, after Standard & Poor’s said it would review all 17 euro nations for possible downgrades.

Ecolab Offering

Sales climbed to the most since companies offered $15.8 billion on Nov. 7, Bloomberg data show.

Ecolab, based in St. Paul, Minnesota, issued $500 million of 2.375 percent, three-year notes that yield 200 basis points more than similar-maturity Treasuries and $1.25 billion of 3 percent, five-year debt that pays a spread of 210 basis points, Bloomberg data show. It also sold $1.25 billion of 4.35 percent, 10-year debentures that pay a 230 basis-point spread and $750 million of 5.5 percent, 30-year bonds that yield 255 basis points more than the benchmark.

CIBC’s three-year covered bonds pay 68 basis points more than the benchmark mid-swap rate, Bloomberg data show. It was the largest offering of the debt since Bank of Nova Scotia issued $2 billion of covered bonds on Oct. 28.

Noble Energy Inc., Tencent Holdings Ltd. and Senior Housing Properties Trust were also among borrowers issuing corporate bonds in the U.S. today, Bloomberg data show.

--Editor: John Parry, Pierre Paulden

To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.


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