LVMH sells debt for first time since 2020 after stellar results

LVMH is selling debt for the first time in three years, seizing on quarterly results that blew past market expectations as well as calmer conditions in Europe’s credit market.

The Paris-based owner of Christian Dior and Louis Vuitton is marketing at least 500 million euros (S$731 million) of new bonds due in 2025, according to a person familiar with the matter, who asked not to be identified as they aren’t authorised to speak publicly.

It’s set to be LVMH’s first venture into global debt markets since April 2020, when the company sold debt in the wake of the pandemic. That sale came soon after a huge deal in February to support the acquisition of Tiffany .

CreditSights analysts including Maryum Ali expect that there will be high demand for the LVMH bond, given the company’s “exceptionally strong credit fundamentals and infrequent foray into the bond markets.” She highlighted its low leverage and good free cash flow.

Today’s deal comes after LVMH reported first quarter organic sales growth in its fashion and leather goods unit of 18 per cent – almost twice what analysts were expecting and spurring a new record high for the stock. It also comes as a major credit risk measure in Europe falls back near levels seen before the recent banking-sector turmoil.

Cargill and Eurogrid are among other companies marketing new deals in the region on Monday (Apr 17), with market participants expecting deals to pick up this week.

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Marketing for LVMH’s new bond started at around 15 basis points over mid-swaps, according to the person familiar. Barclays, Deutsche Bank, JPMorgan Chase, Societe Generale and Mitsubishi UFJ Financial Group, are working to the deal, which is set to price later on Monday.

A spokesperson for LVMH didn’t immediately reply to a request for comment. BLOOMBERG