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Argyll launches pounds 150m bond

Patrick Hosking
Thursday 18 February 1993 00:02 GMT
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ARGYLL, the Safeway supermarkets group, yesterday launched a pounds 150m bond issue, quelling speculation that it might opt for a convertible issue, writes Patrick Hosking.

The proceeds will fund new store openings and be used for general corporate purposes. Argyll decided to take advantage of prevailing low interest rates, paying a coupon of 8.125 per cent on the seven-year sterling Eurobond. That compares with a return on capital of at least 20 per cent it expects to achieve from new stores.

Last month there was speculation that Argyll was considering an issue of convertible stock. Colin Smith, finance director, said: 'This should put any remaining rumours to rest.'

Credit Suisse First Boston was the lead manager for the issue, which was welcomed in the stock market. Argyll shares were marked up 5 1/2 p to 368p.

Marks & Spencer continues to expand on the Continent, announcing plans for a third store in Spain yesterday. It has acquired a leasehold in the L'illa shopping centre in Barcelona. The store is due to open in November. M&S shops in Madrid and Seville have proved very popular.

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