Banking, finance, and taxes
Corporate Bond Floodgates Open Wide (IBM, JNJ, DELL, HD, AGN, AXP, ATK, AON, HPQ, MHS, HSP, HCN, PH, GR, USB, BRK.B, FTE, CM)
Published:
Last Updated:
If corporations have high credit ratings, there is an opportunity to borrow for rates that have not been seen in years (or ever). August saw key bond issuances at extremely low rates from Johnson & Johnson (NYSE: JNJ) and from International Business Machines Corp. (NYSE: IBM), but this is nothing compared to what we are seeing in September. We are not even a full work week into the month, there was Labor Day, and there is Rosh Hashanah starting Wednesday at sundown. This month is already nearly double in planned corporate bond issuances from September-2009 with names such as Dell Inc. (NASDAQ: DELL), Home Depot Inc. (NYSE: HD), Allergan Inc. (NYSE: AGN), American Express Company (NYSE: AXP), Alliant Techsystems Inc. (NYSE: ATK), AON Corp. (NYSE: AON), Hewlett Packard Co. (NYSE: HPQ), Medco Health Solutions Inc. (NYSE: MHS), Hospira Inc. (NYSE: HSP), Health Care Reit Inc. (NYSE: HCN), Parker Hannifin Corporation (NYSE: PH), Goodrich Corp. (NYSE: GR), and U.S. Bancorp (NYSE: USB). Berkshire Hathaway Inc. (NYSE: BRK.B) is getting a bond offering off for its BNSF rail unit and cross-border we have seen set offerings for France Telecom (NYSE: FTE), Canadian Imperial Bank of Commerce (NYSE: CM)
In August, IBM (NYSE: IBM) sold bonds at record low rates at 1% for 3-year notes, which would lead one to wonder why it did not issue more to go out on the curve. Johnson & Johnson (NYSE: JNJ) sold $1.1 billion via $550 million in 10-Year notes at 2.95% and $550 million in 30-Year bonds at 4.5%.
Dell Inc. (NASDAQ: DELL) sold $1.5 billion in 3-Year notes at +70/Treasuries, 5-Year year notes at +90/Treasuries, and a 30-Year at +175/T-Bonds.
Home Depot Inc. (NYSE: HD) showed a $1 billion offering: 10-Year notes at +135/Treasuries for 3.95% in senior notes and 30-Year senior notes at +175/T-Bonds for 5.40%.
Allergan Inc. (NYSE: AGN) sold a $650 million 10-year note at +80/Treasuries at a slight discount to PAR for a yield of only 3.411%.
Hospira Inc. (NYSE: HSP) issued a $500 million 30-year bond which already got a BBB+ rating from S&P as a redemption issue for its 5.55% notes due in 2012.
Health Care Reit Inc. (NYSE: HCN) sold $450 million in 7-year notes for 4.70% due Sept. 15, 2017 at a slight discount to PAR to yield just under 4.75%.
Aon Corporation (NYSE: AON) sold $1.5 billion in notes to help it close the Hewitt Associates deal (rates are coupons, not yield): $600 million 5-Year notes at 3.50%; $600 million in 10-Year notes at 5.00%; and $300 million 30-Year bonds at 6.25%.
Alliant Techsystems Inc. (NYSE: ATK) commenced a public offering of $300 million senior 10-Year notes, with approximately $280 million to fund its redemption of all its outstanding 2.75% convertible subordinated notes due 2024 and any remaining net proceeds for general corporate purposes. It also plans to refinance its credit facilities with a 5-Year senior credit facility of up to $1 billion.
Canadian Imperial Bank of Commerce (NYSE: CM) sold $1.5 billion in 3-Year notes at +75 basis points over Treasuries. France Telecom (NYSE: FTE) sold some $750 million in 5-year notes between 80 and 85 basis points over Treasuries.
Berkshire Hathaway Inc. (NYSE: BRK.B) boosted its Burlington Northern Santa Fe issue from $500 million to $750 million per Bloomberg figures. The $250 million in 10-year notes apparently went off 100/Treasuries at 3.61% and $500 million in 30-Year bonds went off at +140/T-bonds at 5.07%.
Medco Health Solutions Inc. (NYSE: MHS) sold $1 billion in senior notes (coupon rather than yield): $500 million in 5-Year notes at 2.75% and $500 million in 10-Year notes at 4.125%.
Parker Hannifin Corp. (NYSE: PH) had a $300 million offering for a 12-Year note (due 2022) with a 3.50% coupon at +100/Treasuries and the prospectus listed a make whole call of T+15 basis points.
MANY PRICINGS DUE WEDNESDAY
American Express Company (NYSE: AXP), via its American Express Credit Corp., is expected to sell a $1 billion in 5-year benchmark notes.
Hewlett Packard Co. (NYSE: HPQ) is expected to sell a three-part benchmark note offering of 2-Year, 3-Year, and 5-Year tranches.
Unum Group (NYSE: UNM) is expected to sell some $300 million in debt in a 10-year offering.
U.S. Bancorp (NYSE: USB) has a 3-Year benchmark note due to price today although terms are still outstanding.
Goodrich Corp. (NYSE: GR) is said to have a $500 million or $600 million offering of senior unsecured notes that may be out to 10-Year maturities.
Please be advised that these yields, coupons, and other indications were based upon many preliminary prospectus filings and some of the spreads or conditions of each offering could have changed slightly from the original and preliminary terms.
You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.
JON C. OGG
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
