Morning Commentary: McCormick, Procter & Gamble market notes; existing bonds mixed in trading

By Cristal Cody

Tupelo, Miss., Aug. 9 – McCormick & Co., Inc. is moving forward with a bond sale to help finance its acquisition of Reckitt Benckiser Group plc’s food division.

The company announced plans to price a four-tranche offering of fixed-rate notes in its first high-grade offering since 2015.

Also, Procter & Gamble Co. intends to price two tranches of fixed-rate notes.

In other primary activity, British American Tobacco plc plans to price euro and sterling notes on Wednesday following its $17.25 billion eight-tranche offering of dollar-denominated senior notes on Tuesday through subsidiary BAT Capital Corp., a source said.

In the secondary market, McCormick’s 3.25% notes due Nov. 15, 2025 were unchanged over the morning at 100.46, a source said.

The Sparks, Md.-based spice company sold the notes in a $250 million offering on Nov. 3, 2015 at 99.263 to yield 3.337% and a spread of Treasuries plus 112.5 basis points.

Procter & Gamble’s last issuance of notes in 2016 traded better at the start of the day, according to a market source.

The Cincinnati-based consumer products company’s 2.45% notes due Nov. 3, 2026 improved to 99.86 from where the bonds last traded at 98.32 on Tuesday.

Procter & Gamble sold $875 million of the notes on Oct. 31, 2016 at 99.859 to yield 2.466% and a spread of 63 bps over Treasuries.

Overall secondary trading volume rose to $17.04 billion on Tuesday from $14.32 billion on Monday, according to Trace.

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