FedEx Plans Bond Offering in Euros for TNT Deal
FedEx Corp. will seek to finance part of its TNT Express acquisition with a debt offering in euros, its first non-U.S. bond issue.
The Memphis-based company on April 4 released detailed plans for a 3 billion euro ($3.4 billion) bond issue.
An offering in euros takes advantage of favorable interest rates by European lenders. Some of Europe's central banks have held interest rates below zero in attempts to stimulate the economy.
Four groups of bonds would be issued, according to FedEx, with interest rates ranging from a floating rate not less than 0.0% over three years to 1.625% over 11 years.
In contrast, the company's $2 billion U.S. debt offering less than two weeks ago was split between 10-year notes at 3.25% and 30-year notes at 4.55%.
FedEx said proceeds of the European bond issue would be used for working capital and general corporate purposes, including the TNT Express acquisition. FedEx last April announced plans to buy the European package delivery company for $4.8 billion.
FedEx has said it would finance the deal with debt proceeds and cash from operations.
FedEx officials have been seeking regulatory approval of the transaction in countries in which TNT Express operates. They expect the deal to close in the first half of this year.
FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
