Last week's new corporate bond issues totaling nearly $17 billion marked four consecutive weeks below $20 billion. However, just three of the biggest borrowers made up more than half the total. All of the borrowers mentioned below priced their deals before the Fed's meeting last week and the subsequent rate run-up, which probably saved them several basis points on discount pricing and or coupon rates. Here are a few of the week's highlights.
With $6.25 billion in new paper, Chevron Corporation (NYSE:CVX) covered more than one-third of last week's new issues all by itself. The company sold tranches of three-, five-, seven-, and 10-year paper and is using the money for paying down commercial paper and general corporate purposes.
Continuing with the refinance theme, Agilent Technologies Inc. (NYSE:A) measured out $600 million of 3.875% 10-year paper. The money goes toward redeeming $250 million of maturing notes and "general corporate purposes, including payment of costs associated with its previously announced targeted restructuring program and to repurchase outstanding shares of its common stock pursuant to its existing stock repurchase program." Unlike most recent refinance deals, this one increases Agilent Technologies Inc. (NYSE:A)'s debt service costs by about $17 million per year.
Even with the increase in bond yields over the past month or so, many companies are still able to save millions with refinance deals. Only time will tell whether that continues and whether the low volume of new deals is temporary or a long-term trend.
The article 5 Companies That Beat Last Week's Rate Hike originally appeared on Fool.com and is written by Russ Krull.
Russ Krull owns shares of Chevron. The Motley Fool recommends Chevron.
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