RegionsNorth AmericaUnilever and Texas Instruments Set New Record Low for Commercial Paper Rates

Unilever and Texas Instruments Set New Record Low for Commercial Paper Rates

Consumer goods group Unilever and microchip maker Texas Instruments have both issued notes at record-low coupons on 30 July, beating the record issues established earlier this year by IBM Corp and McDonald’s.

Unilever priced US$450m of three-year notes via its financing arm, Unilever Capital Corp, at a coupon of 0.45%, beating the previous low of 0.55% established by IBM on 1 February. The notes priced at US$99.603, to yield 0.584% or 27 basis points over treasuries. Unilever is rated A1/A+.

The Anglo-Dutch group also sold US$550m of five-year notes with a coupon of 0.85%, again beating a previous record of 0.875% established just days earlier by Bristol-Myers Squibb. The notes priced at US$98.816, to yield 1.094% or 47 basis points over treasuries.

Texas Instruments, rated A1/A+/A+, matched Unilever’s coupon later in the day by selling US$750m of three-year paper priced at US$99.547, to yield 0.603% or 30 basis points over treasuries.

Texas also sold US$750m of seven-years at a coupon of 1.65%, beating the previous record of 1.875% established by IBM and McDonald’s in May. The notes priced at US$99.390, to yield 1.743% or 75 basis points over treasuries.

The commercial paper deals reflected a busy session in the US primary high-grade bond market, with 10 corporations announcing new deals totalling US$10bn to capitalise on the issuer-friendly conditions of low rates and strong demand from investors seeking an alternative to low-yielding treasuries.

Monday’s session this week pushed July issuance to about US$68bn, easily exceeding the previous supply record for the month of US$58.7bn issued in July 2010.

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