The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
BALTIMORE, United States — The sportswear company that outfits Stephen Curry, Tom Brady and Notre Dame athletics is preparing its debut bond offering as a global hunt for yield pushes borrowing costs for investment-grade corporates to their lowest in more than a year.
Under Armour Inc. plans to sell $500 million of 10-year bonds that may yield around 1.65 percentage points above comparable government debt, according to a person familiar with the matter who asked not to be named because the deal is private.
The company, which is expanding into more fashion-forward offerings, will use proceeds from the sale to repay debt under its revolving credit facility, according to a regulatory filing on Wednesday. JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. are managing the sale.
The offering comes after companies worldwide issued a record $256 billion of bonds in May. Investors have been piling into US and European corporate debt markets in search of higher-yielding securities as easy-money policies push yields on $9.9 trillion of bonds below zero.
ADVERTISEMENT
Baltimore-based Under Armour cut its annual earnings forecast last week, based in part on the liquidation of Sports Authority Inc., a large customer. That followed the departure of two top executives in May, raising concern the company is losing management talent in key growth areas.
S&P Global Ratings assigned a BBB- rating to the debt, the credit grader said in a statement on Wednesday. It said the company’s plans for the debt should have a neutral effect on leverage.
Average borrowing costs for investment-grade companies in the US fell to 3.05 percent on Tuesday — their lowest since April last year.
Under Armour shares rose on Wednesday in New York, trimming this year’s decline to about 8 percent.
By Claire Boston; editors: Nabila Ahmed, Kenneth Pringle and Eric J. Weiner.
From analysis of the global fashion and beauty industries to career and personal advice, BoF’s founder and CEO, Imran Amed, will be answering your questions on Sunday, February 18, 2024 during London Fashion Week.
The State of Fashion 2024 breaks down the 10 themes that will define the industry in the year ahead.
Imran Amed reviews the most important fashion stories of the year and shares his predictions on what this means for the industry in 2024.
After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a black tie gala followed by an intimate performance from Rita Ora — guest starring Billy Porter.