January 27, 2023

Procter & Gamble filed paperwork this week with the Securities and Exchange Commission to sell $2.1B in debt notes. There is no word on what the consumer products giant plans to do with the money. The announcement comes on the heels of the acquisition of a new hair care brand. It also follows posted results for the last quarter, the first decline since 2017.

Our Jim Russell tells the Cincinnati Business Courier this kind of raise is not cause for concern. “It could be for a variety of reasons. They’re not tipping their hand, nor are they required to be really specific in a prospective.” Jim explains that P&G could be refinancing some of its more expensive existing debt for example, covering internal operations or funding inventory around the globe. “It could be for purposes they see in the future that they have not yet made public.”

Jim also points out the company’s debt rating means it can receive the lowest interest rate available for corporate borrowers. “Blue chips like Procter can borrow just slightly higher than the U.S. government can borrow,” he said. “I can assure you, the sharp pencils in Procter & Gamble’s accounting department are not interested in paying one penny more than they have to.”

 

 

Jim Russell
Portfolio Manager
jrussell@bahl-gaynor.com

See the entire article HERE