Colgate-Palmolive Co., the world?s largest toothpaste maker, may issue $438 million of debt as soon as today in a two-part offering, according to a person familiar with the transaction.
The sale may include $188 million of 5-year notes that yield about 40 basis points more than similar-maturity Treasuries and $250 million of 10-year securities that may pay a spread of about 55 basis points, said the person, who declined to be identified because terms aren?t set. A basis point is 0.01 percentage point.
Colgate-Palmolive, the maker of Ajax cleaners and Hill?s pet food, is marketing the debt after announcing yesterday that third-quarter profit exceeded analyst estimates. Earnings at the New York-based company rose 4.9 percent as sales in Asia and Africa increased.
Citigroup Inc., Bank of America Corp., Goldman Sachs Group Inc. and Royal Bank of Scotland Group Plc are managing the five- year portion of the offering, the person said. Deutsche Bank AG, Citigroup, Bank of America and BNP Paribas SA are handling the sale of the 10-year notes, according to the person.
Moody?s Investors Service ranks Colgate-Palmolive Aa3 and Standard & Poor?s grades the company an equivalent AA-.
Colgate-Palmolive last sold debt in July 2009, when it issued $300 million of 3.15 percent notes due in August 2015, according to data compiled by Bloomberg.
The company?s $254.4 million of notes due in November 2016 traded at 118.5 cents on the dollar yesterday to yield 1.93 percent, or 70 basis points more than similar-maturity Treasuries, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority.
Net income at Colgate-Palmolive advanced to $619 million, or $1.21 a share, the company said yesterday. That beat the median estimate of $1.19 a share by 13 analysts in a Bloomberg survey.
To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net.
To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.
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