Shell Completes $2.5 Billion, Three-Part U.S. Bond Deal

Royal Dutch Shell PLC unit Shell International Finance BV sold $2.5 billion of bonds in a three-part deal Tuesday, marking the company's first debt issuance in more than two years.

The deal includes $1 billion tranches due in five and 10 years, plus $500 million of 30-year bonds, a term sheet shows. They offer investors yields of 1.244%, 2.424% and 3.627%, respectively, reflecting spreads to Treasurys of 0.5, 0.7 and 0.82 percentage points, in line with price guidance from an earlier term sheet.

Shell last sold bonds in the U.S. in June 2010, including a five-year bond with a 3.1% coupon, data provider Dealogic shows. Tuesday's five-year yield, at 1.244%, underscores the savings companies can achieve in this low-rate environment.

Mary Talbutt-Glassberg, fixed-income portfolio manager and trader at Davidson Trust Co., said the bond's spreads--the risk premium, expressed in yield, versus Treasurys--should tighten in secondary trading thanks to Shell's strong ratings, household-name status and rarity of issuance.

The bonds carry provisional ratings of Aa1 from Moody's Investors Service and AA from Standard & Poor's Ratings Services. The deal is registered with the Securities and Exchange Commission.

Goldman Sachs Group Inc. and Morgan Stanley are lead underwriters on the deal. Proceeds are for general corporate purposes.


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