LONDON - American multinational conglomerate 3M has joined an array of US bluechips that have accessed the euro market in recent weeks, announcing an eight-year offering on Monday.
Syndicate bankers said that 3M would likely enjoy a warm reception thanks to its credit quality, its ability to offer European investors diversification beyond their home continent, and its rarity value.
The company, which posted a 6 per cent rise in quarterly profit last month after higher sales across all its businesses, started marketing the notes at mid-swaps plus 35bp area via leads Barclays, Goldman Sachs and JP Morgan.
Rated Aa2/AA-, 3M has just one very illiquid euro bond outstanding, according to Tradeweb.
As a result, leads looked to similarly rated credits like Siemens, Total, Statoil, Nestle, Procter & Gamble, IBM and BASF for pricing references.
One lead, however, noted that due to 3M's consistent cash flow, scale, and conservative capital structure, it trades at the tight end of all its AA peers, and "often through Triple A credits such as Microsoft and Johnson & Johnson in the US market", limiting even the value of those names as direct comparables.
The transaction follows a EUR2.5bn dual-tranche bond from IBM on Thursday, the biggest senior euro trade of the year in the currency, and two other deals last week from compatriots Procter & Gamble and Coca Cola Enterprises.
Thanks to advantageous rates, all three were able to print at levels almost flat to - or even through - where they would have printed equivalent US dollar deals.
Oliver Sedgwick, head of investment-grade syndicate for EMEA at Goldman Sachs, a lead on both IBM and 3M, said that several factors were aligned to create an ideal backdrop.
"The combination of volatility in the US and euro spread stability means that the euro market is more attractive now than it has been for years for US issuers," he said last week.