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Shell Plans $2.5 Billion Issue in First Bond Sale Since 2010

By Charles Mead on August 14, 2012

Royal Dutch Shell Plc (RDSA), Europe’s largest oil producer, plans to raise $2.5 billion with its first bond offering in two years with a three-part sale.

The company intends to issue $1 billion of five-year notes that may yield 50 basis points more than similar-maturity Treasuries, an equal portion of 10-year bonds with a 70 basis- point spread, and $500 million of 30-year debt that may pay 82 basis points more than benchmarks, according to a person familiar with the offering who asked not to be identified, citing lack of authorization to speak publicly about the sale. The bonds may be rated Aa1 by Moody’s Investors Service, its second-highest grade, the person said.

The company’s Shell International Finance unit, which last issued dollar obligations due in three decades in March 2010, will use proceeds for general corporate purposes, The Hague- based company said today in a regulatory filing.

Shell’s longest outstanding maturity, its $1 billion of 5.5 percent bonds due March 2040, traded at 132 cents on the dollar to yield 3.65 percent at 8:08 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The company’s $750 million of 5.2 percent dollar-denominated notes maturing March 2017 traded at 118.4 cents with a 1.1 percent yield Aug. 10.

Goldman Sachs Group Inc. and Morgan Stanley are managing the sale, the person said.

To contact the reporter on this story: Charles Mead in New York at [email protected]

To contact the editor responsible for this story: Alan Goldstein at [email protected]


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