Tue, Mar 29, 2011 - Page 10 News List

Unilever prices 300 million yuan in ‘dim sum bonds’

Bloomberg

Unilever PLC priced 300 million yuan (US$46 million) of bonds in Hong Kong, becoming the first European consumer company to sell so-called “dim sum bonds,” according to a person familiar with the matter.

The notes were priced to yield 1.15 percent, said the person, who asked not to be identified because the details are private. Deutsche Bank AG and HSBC Holdings PLC are managing the sale of the three-year, yuan-denominated bonds, the person said.

The bond sale will help fuel the world’s second-largest consumer-goods maker’s growth plans “by increasing our investment in China,” Unilever treasurer Graeme Pitkethly said in an e-mailed statement announcing the deal.

Unilever becomes the second consumer company to sell dim sum bonds after McDonald’s Corp, the world’s largest restaurant chain, last year sold 200 million yuan of 3 percent notes due in September 2013.

The maker of Dove soap, Lipton tea and Vaseline petroleum jelly is among companies looking to faster-growing emerging markets to drive sales as competition and government budget cuts in the US and Europe hold back growth.

HSBC, the top-ranked underwriter of yuan-denominated bonds issued in Hong Kong this year, expects sales of such debt will more than triple to between 120 billion and 150 billion yuan this year on rising demand for China’s currency outside the country.

The London and Rotterdam-based company has at least 5.65 billion euros (US$7.95 billion) of debt due in the next decade, according to data compiled by Bloomberg. Unilever is the first maker of so-called fast-moving consumer goods to sell dim sum bonds, according to its statement and data compiled by Bloomberg.

Unilever is one of the “late starters” in China, where it competes against Procter & Gamble Co, CEO Paul Polman said in a teleconference last month, according to a Bloomberg transcript.

“Our business is smaller and we continue to invest in China to close that gap,” he said.

Unilever’s growth in the world’s most populous nation is in the “upper double digits,” Polman said, according to the transcript.

The company last month reported growth in its fourth-quarter underlying sales, which exclude acquisitions and currency fluctuations, of 5.1 percent, beating the 4.1 percent median estimate of eight analysts.

About 40 percent of sales come from Asia and Africa, where Unilever’s growth is faster than in the Americas, according to data compiled by Bloomberg. Revenue fell in Europe last year, according to the data.

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