(Bloomberg) — Global alcohol maker Diageo Plc is seeking new long dated euro debt as part of a bumper corporate bond offering, with new issuance stepping up a gear in Europe’s primary market.
The owner of the Smirnoff vodka, Johnnie Walker whiskey and Guinness brands is looking to raise a maximum of €1.9 billion ($2.1 billion) from a three part offering with maturities of six and a half years, 11 years and 20 years, according to a person familiar with the matter who asked not to be identified. The deal is expected to price later today.
Less than €15 billion of 20-year and longer senior investment-grade debt has been raised by corporate issuers since the start of the year versus around €194 billion in shorter maturities, according to data compiled by Bloomberg. Some investors have been keen to lock in higher yields while they can as central banks globally start to cut interest rates. In Europe, some ECB officials have been talking up another the prospect of another reduction recently, having already cut rates once this year.
Still, at more than €1.6 billion, demand for the longer tranche was less than that seen for the shorter tranches.
Corporates are leading the way on Tuesday in what is set to be the busiest day for new debt sales in Europe since June 4, with at least 18 issuers selling 26 tranches, the data shows. Other companies in the market include BT Group Plc, Deutsche Lufthansa AG and National Grid North America Inc.
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