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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