Sanofi and LVMH offer Euro denominated bonds above prevailing rates

November 6
10:54 AM 2013

Two famed brands in Europe, namely Sanofi SA and LVMH Moet Hennessy Vuitton SA are now in the process of selling Euro denominated bonds. This comes after one of the busiest weeks in the past two months in terms of corporate debt issuances in the market.

The largest pharmaceutical firm on France has sold EUR1 billion worth of ten year securities while the world's biggest luxury goods manufacturer is offering EUR600 million worth of seven year notes. The two deals were confirmed by people familiar with the transactions.

This week alone, the bond issuances from non-financial companies is estimated to reach EUR8.3 billion. This is the highest volume recorded according to Bloomberg data compiled as of Sept.15. The said increase has been attributed to the borrowers anticipating the European Central Bank would be leaving its main refinancing rates at 0.5% after it meets tomorrow. Another possible factor is the forecast of lack of economic strength in the US this week, which in turn bolsters the claim for the maintenance of the stimulus program for the immediate future.

The notes of Sanofi provides a yield of 53 basis points higher than the swap rate, according to sources. LVMH on the other hand is offering a spread of 30 basis points above current rates.

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