McDonald’s is marketing euro bonds, taking advantage of borrowing costs that have fallen to the lowest in a year because of the ECB’s expanding its stimulus programme.
The fast-food chain is offering the securities, maturing in January 2021, November 2023 and May 2028, according to a source.
The ECB’s announcement in March that it will add corporate bonds to its quantitative-easing programme has driven borrowing costs in the region toward record lows.
Investors demand an average yield of 1% to hold euro bonds sold by highly rated companies, compared with 3.16% for similarly rated dollar bonds, according to Bank of America Merrill Lynch data.
“At the prices they can issue at today, they’d be mad not to,” said Paul Suter, a London-based fixed income trader at ECM Asset Management, an investment team within Wells Fargo Asset Management.
The company is marketing the 2021 notes at an initial yield of 70 basis points above benchmark rates, the 2023 notes at a 90-basis point premium and the 12-year securities to pay an extra 120 basis points, according to a source.
Investors demand about 87 basis points above benchmark rates to hold the euro debt of highly rated companies.
The maker of Big Mac hamburgers and Chicken McNuggets, which earns about two-thirds of sales outside the US, last sold euro-denominated bonds in May in a €2bn offering.
Unilever sold bonds in the single currency on Monday, including some with a zero-percent coupon.
© Irish Examiner Ltd. All rights reserved