By Prabha Natarajan Of DOW JONES NEWSWIRES Sanofi (SNY, SAN.FR) launched its $1 billion, three-year bond issue on Tuesday at a large-than-expected size and a slightly lower price. The company, formerly Sanofi-Aventis, will tap the market with issue to repay existing debt and raise funds for other corporate purposes. The pharmaceutical company's three-year issue launched at 83 basis points over comparable Treasury yields, about 2 basis points tighter than initial talk. Bank of America Merrill Lynch, Citigroup Inc., Natixis and Deutsche Bank AG are the bookrunners on the deal. Sanofi, the Paris-based multinational, is among European corporate issuers that are expected to tap the U.S. market for funds in what are called "opportunistic" transactions. The current low borrowing rates offer an attractive opportunity for companies. This coupled with the improved sentiment among investors makes it a good time for companies to issue debt. Other companies that are in the market Tuesday include McDonald's Corp. (MCD) with a $350 million, 10-year issue; Qwest Corp.'s benchmark 10-year issue; XL Group PLC's (XL) $400 million 10-year unsecured notes; and Bemis Co. Inc's (BMS) $400 million 10-year senior unsecured notes. Credit markets Tuesday opened on an upbeat note on hope the European Union is working on resolving the debt crisis. On Monday, there was $1.95 billion of newly issued investment-grade corporate bonds, according to Tradeweb. The Markit.CDX.NA.IG, the derivatives index used as a gauge of investor sentiment, continues to tighten and is 4 basis points firmer on the day, according to Markit data. -By Prabha Natarajan, Dow Jones Newswires; 212-416-2468; prabha.natarajan@dowjones.com
