E*TRADE Scores Big with $1.3 Billion Debt Refinancing

The online broker is planning to sell just over $1.3 billion in two different senior notes offerings which will mature in 2017 and 2019. We have yet to see the pricing and indicated yield but these notes are effectively being sold to refinance its 12.5% Springing Lien Notes due in 2017 and against its 7.875% senior notes which are due in 2015. The amount sold in the new offering amount includes the redemption premiums, principal amount, accrued interest, and even the related fees and expenses.

The notes are being sold via BofA Merrill Lynch, Goldman Sachs & Co., and Morgan Stanley. we have yet to see any formal pricing but this significantly pushes out any debt coming due and it should significantly lower the firm’s annual interest payments and net borrowing costs. E*TRADE shares are trading up almost 5% at $8.80 versus a 52-week range of $7.08 to $11.50. E*TRADE’s market cap is $2.5 billion as of now.

JON C. OGG