Lowe's Initiates Five-Part Bond Sale to Fund FBM Acquisition Amidst Robust US Investment-Grade Debt Market Activity

Lowe's is selling dollar-denominated bonds in five parts to fund its acquisition of Foundation Building Materials. The bonds will yield between 100 and 105 basis points above Treasuries and have a special redemption clause if the acquisition doesn't close by August 2027. Bank of America, Goldman Sachs, and Wells Fargo are managing the offering. The acquisition is rated Baa1 by Moody's and BBB+ by S&P Global Ratings.

Lowe's Cos. Inc. has initiated a five-part bond sale to finance its acquisition of Foundation Building Materials (FBM). The home-improvement retailer is marketing the bonds in multiple tranches, with the longest portion being a 10-year security yielding between 100 basis points and 105 basis points above U.S. Treasuries Lowe’s Kicks Off Five-Part Bond Sale to Fund FBM Acquisition^[1].

The bonds, which are being managed by Bank of America Corp., Goldman Sachs Group Inc., and Wells Fargo & Co., are part of a broader funding strategy that includes unsecured borrowings and cash on hand. The acquisition has a special redemption clause, allowing Lowe's to redeem the bonds if the purchase doesn't close by August 19, 2027 Lowe’s Kicks Off Five-Part Bond Sale to Fund FBM Acquisition^[1].

Lowe's, which is rated Baa1 by Moody's and BBB+ by S&P Global Ratings, is joining at least seven other potential issuers in the U.S. investment-grade debt market. This robust activity is driven by favorable credit conditions, including lower Treasury yields and a multi-decade low in the average corporate spread Lowe’s Kicks Off Five-Part Bond Sale to Fund FBM Acquisition^[1].

The bond sale is part of a broader trend in the primary market, where issuers are benefiting from favorable credit conditions. The volume of highly rated bonds has reached $156 billion this month, on track to exceed the record of $170 billion set in the prior year Lowe’s Kicks Off Five-Part Bond Sale to Fund FBM Acquisition^[1].