Under Armour Plans $500 Million Bond Debut

BALTIMORE, United States — The sportswear company that outfits Stephen Curry, Tom Brady and Notre Dame athletics is preparing its debut bond offering as a global hunt for yield pushes borrowing costs for investment-grade corporates to their lowest in more than a year.

Under Armour Inc. plans to sell $500 million of 10-year bonds that may yield around 1.65 percentage points above comparable government debt, according to a person familiar with the matter who asked not to be named because the deal is private.

The company, which is expanding into more fashion-forward offerings, will use proceeds from the sale to repay debt under its revolving credit facility, according to a regulatory filing on Wednesday. JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. are managing the sale.

The offering comes after companies worldwide issued a record $256 billion of bonds in May. Investors have been piling into US and European corporate debt markets in search of higher-yielding securities as easy-money policies push yields on $9.9 trillion of bonds below zero.

Baltimore-based Under Armour cut its annual earnings forecast last week, based in part on the liquidation of Sports Authority Inc., a large customer. That followed the departure of two top executives in May, raising concern the company is losing management talent in key growth areas.

S&P Global Ratings assigned a BBB- rating to the debt, the credit grader said in a statement on Wednesday. It said the company’s plans for the debt should have a neutral effect on leverage.

Average borrowing costs for investment-grade companies in the US fell to 3.05 percent on Tuesday — their lowest since April last year.

Under Armour shares rose on Wednesday in New York, trimming this year’s decline to about 8 percent.

By Claire Boston; editors: Nabila Ahmed, Kenneth Pringle and Eric J. Weiner.