BlackRock Inc. (BLK:US), the world’s biggest asset manager, issued $1.5 billion of bonds at its lowest coupons on record to help fund a $1 billion share repurchase from minority owner Barclays Plc. (BARC)
The firm headed by Laurence Fink sold $750 million each of 1.375 percent, three-year notes to yield 100 basis points more than similar-maturity Treasuries and 3.375 percent, 10-year debt at 165 basis points, according to data compiled by Bloomberg. The coupons are the least for three- and 10-year debt issued by the company, Bloomberg data show.
BlackRock intends to use proceeds to fund the repurchase of shares from Barclays, the New York-based money manager said in a filing today. Proceeds may also be used for general corporate purposes, including future debt repayments.
Brian Beades, a BlackRock spokesman, declined to comment.
The firm’s lowest coupons previously stood at 2.25 percent on $500 million of three-year notes issued in December 2009 and 4.25 percent on $750 million of 10-year bonds issued in May 2011.
Barclays, the U.K.’s second-largest bank by assets, will sell its entire $6.1 billion, or 19.6 percent, stake in BlackRock, the London-based bank said in a statement yesterday. The sale comes before a new round of Basel rules would force Barclays to set aside capital against the holding.
The bonds are expected to be rated A1 by Moody’s Investors Service, the fifth-highest level of investment grade, according a person familiar with the transaction who declined to be identified because the sale is private. Citigroup Inc., JPMorgan Chase & Co., and Wells Fargo & Co. managed the sale.
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