In an effort to enhance its financial flexibility and focus on
future growth prospects, one of the leading global consumer product
) has recently sold $500 million worth of 10-year medium-term
notes, Reuters reported.
According to news, the new medium-term notes have been issued at
$98.249 with a coupon rate of 2.30% maturing in May, 2022. The
coupon rate is believed to be the lowest 10-year coupon rate and
Procter & Gamble Company
) 10-year medium-term notes maturing in March 2022. Moreover, the
company will use the fund to retire its old commercial paper.
Financed by a consortium of investment bankers,
JP Morgan Chase & Company
), the funds will be used to retire its old commercial paper. At
the end of fiscal 2011, Colgate has total domestic and foreign
outstanding commercial paper worth $671 million.
Borrowing costs have gone down significantly, marking a record
low, and in turn, facilitating the companies to obtain easy
financing at compelling prices. Corporate bonds are in high demand
as U.S. treasuries are yielding low rates, driving investors toward
the bonds issued by the sound companies.
Debt offers of big companies are being oversubscribed, providing
the corporation the option to price their offerings at lower rates.
Hence, several companies are coming up with debt offerings to
generate interest expense savings by refinancing their outstanding
Colgate-Palmolive is the industry leader in oral care and
commands market-leading positions in several personal care product
categories. Furthermore, a strong portfolio of globally recognized
brands, including Colgate, Palmolive, Mennen, Softsoap, Irish
Spring, Protex, Sorriso, Kolynos, Elmex, Ajax and Axion provide a
competitive advantage to the company and strengthens its dominant
position in the market.
Moreover, we believe Colgate-Palmolive's continued focus on
innovation and development of new products will facilitate it in
enhancing its customer base while increasing market share. The
company is focusing on acquiring businesses, which have the
potential to generate higher top-line growth and margin. We believe
the company's recent acquisition and divestment transactions will
boost its bottom line.
However, Colgate-Palmolive operates in an intensely competitive
environment. The resurgence of archrival Procter & Gamble has
signaled new challenges. Global competitive conditions have also
intensified, and Colgate is facing strong competition in China,
Russia, India, Hong Kong, Brazil and Mexico.
Currently, Colgate-Palmolive maintains a Zacks #3 Rank, which
translates into a short-term Hold recommendation. Our long-term
recommendation on the stock remains Neutral.
CITIGROUP INC (C): Free Stock Analysis Report
COLGATE PALMOLI (CL): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
MORGAN STANLEY (MS): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis
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