Month: January 2025

(Reuters) -Smithfield Foods on Monday made public its paperwork for its New York initial public offering as the maker of Farmland bacon and Farmer John sausages prepares for its U.S. stock market return after more than a decade.

Hong Kong-based WH Group, the world’s largest pork producer that took Smithfield private in 2013 for $4.7 billion, will sell some of its shares in the Virginia-based company in the offering, alongside the company.

The company is spinning off its U.S. and Mexico businesses as it looks to unlock their value and boost Smithfield’s access to capital markets.

WH Group said in October the IPO is expected to represent up to 20% of Smithfield’s shares on a fully diluted basis and value the company at no less than $5.38 billion.

Smithfield reported a net income of $581 million in the nine months ended Sept. 29 on sales of $10.19 billion. That compares with a net loss of $2 million in the nine months ended Oct. 1, 2023 on sales of $10.64 billion.

Pork producers in China have come under pressure from declining consumer demand as the world’s second-biggest economy has struggled in recent years, said Dennis Smith, commodity broker for Archer Financial Services.

“Demand took a freaking nose dive,” Smith said. “Those guys took huge losses.”

POISED FOR U.S. STOCK MARKET RETURN

Smithfield was founded in 1936 as a packing company in Virginia. Since then, it has grown into one of the major producers of packaged meats and fresh pork products.

The company was listed on the New York Stock Exchange from 1999 until its acquisition in 2013.

Smithfield, which separated its European operations last year, confidentially filed for the U.S. IPO on Oct. 4.

The IPO proceeds will be used for capital investments in infrastructure, automation and capacity expansion, Smithfield said.

Smithfield will list on the Nasdaq under the symbol “SFD.”

Morgan Stanley, BofA Securities and Goldman Sachs are the lead underwriters.

(Reuters) – U.S. companies rushed to the corporate bond markets on Monday as what is usually a seasonal fund-raising spree over the first few days of a new year gained extra momentum to get ahead of any further rise in Treasury yields – which would increase funding costs – after jobs data on Friday.

Some 22 companies were offering new bonds in the U.S. investment-grade bond market on Monday, taking the tally of new borrowers to 34 in the first few days of 2025.

Syndicate bankers expect to see companies raising nearly $65 billion this week, and perhaps as much as $200 billion this month, in a bond issuance spree that is showing no sign of slowing after a prolific 2024.

“With spreads nearing historic levels and the market ostensibly giving up on the hope of significantly lower risk-free rates, now looks like an opportune time for corporates to fund themselves,” said Connor Fitzgerald, fixed income portfolio manager at Wellington Management.

“This is especially the case when you consider the uncertainty the market may have to contend with in 2025 as the incoming administration’s policies – some of which are unorthodox – really start to take shape,” he said.

Companies were also issuing bonds to take advantage of credit spreads, or the premium they pay over Treasuries, which are still only a few basis points above their record tightest levels touched on Nov. 30, at 83 basis points on Friday, according to the ICE BofA Corporate Index.

In 2024, investment-grade rated companies raised $1.52 trillion, 26% more than the $1.21 trillion in 2023, making it the second most prolific year on record, according to Informa Global Markets data.

Several large Yankee deals came to market on Monday, including from BNP Paribas, Societe Generale, Hyundai Capital America and Toyota. Tractor maker John Deere and heavy equipment producer Caterpillar are also issuing bonds via their financing arms.

Monday’s slate of bond offerings follows robust debt issuance on Friday, when automakers Ford Motor and General Motors tapped the market.