World: Diageo sells new long dated euro debt as part of a bumper corporate bond offering

Global alcohol maker Diageo Plc sold 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, Yahoo Finance reported on August 27.

The owner of the Smirnoff vodka, Johnnie Walker whiskey and Guinness brands raised €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.

Less than €15 billion of 20-year and longer senior investment-grade debt had been raised by corporate issuers since the start of the year versus around €194 billion in shorter maturities, according to data compiled by Bloomberg as of Friday. 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 €1.4 billion, demand for the longer tranche was less than that seen for the shorter tranches.

Diageo joined a cohort of corporates, financial institutions and public sector borrowers selling almost €22 billion of debt in what was the biggest day for sales since July, the data shows. Other companies in the market included BT Group Plc, Deutsche Lufthansa AG and National Grid North America Inc.

28 August, 2024