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Shell Returns to Swiss Bond Market With Increased Debt Offering

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Screen Shot 2015-07-31 at 19.22.09AUG 17, 2015 – 17:00

(Bloomberg) — Royal Dutch Shell Plc sold bonds in the Swiss currency for the first time since 2006, increasing the offer to more than 1.3 billion francs ($1.3 billion) on strong demand.

The oil giant issued 800 million francs of notes due in August 2023 and 525 million francs of August 2028 bonds, according to data compiled by Bloomberg. The debt was sold to yield 29 basis points and 40 basis points more than benchmark rates, respectively, the data show. The company originally planned to sell 900 million francs of debt, according to a person familiar with the deal who asked not to be identified because they aren’t authorized to speak publicly.

Shell is capitalizing on near record-low borrowing costs in Switzerland after government bond yields turned negative this year. Demand was boosted by corporate debt sales in the Alpine nation totaling just 27.6 billion euros ($30.6 billion) in 2015, compared with 486.1 billion euros of bonds in the single currency.

“It’s cheap for Shell, so if they were seeing excess demand they may as well sell as many as possible,” said Bryn Jones, the London-based head of fixed-income research at Rathbone Brothers Plc, which oversees 28.4 billion pounds ($44 billion). “It’s hard to get high-quality paper in Swiss francs so I suspect that’s why there’s been high demand for it.”

Jonathan French, a London-based spokesman for Shell, declined to comment on the sale when contacted by phone.

Average yields on Swiss government bonds fell to a record low of minus 0.46 percent on Jan. 23, according to Bank of America Merrill Lynch index data. They were at minus 0.19 percent on Aug. 14, the data show.

To contact the reporter on this story: Alex Longley in London at [email protected] To contact the editors responsible for this story: Shelley Smith at [email protected] Mark McCord, Neil Denslow


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