Big Corporate Borrowing Stimulates Growth

After four weeks averaging more than $50 billion per seven-day period, new corporate bond issues took a breather last week with slightly less than $13 billion of new paper. Even though borrowing was light, some of it should give the economy a little nudge. Here are a few of the highlights.

Honda (NYSE: HMC  ) subsidiary American Honda Finance rolled out a note sale totaling $2.75 billion and consisting of three-year floating rate, three-year 1.125% and five-year 2.125% paper. The shelf registration filing stated that proceeds would be used "to repay other existing indebtedness, to acquire retail loans or retail leases and provide wholesale flooring and commercial loans or for other general corporate purposes." That's a lot of cars, motorcycles, and other Honda machines, assuming most of the money finds its way to lease or purchase financing.

IntercontinentalExchange (NYSE: ICE  ) listed a $1.4 billion offering split into five-year 2.5% and 10-year 4% tranches. The money is being used as part of the financing for ICE's acquisition of NYSE Euronext.

TransCanada (NYSE: TRP  ) piped in $1.25 billion of new cash split between 10-year 3.75% and 30-year 5% note issues. The money will pay down short-term debt that was used to fund the capital program. The SEC filing lists $2.9 billion of notes payable as of June 30, as well as nearly $1.5 billion of long-term debt due over the next year.

Healthcare Realty Trust (NYSE: HR  ) leased $400 million with a 10-year 4.5% note sale. According to the company press release, the money will be used "to repay outstanding indebtedness under its unsecured line of credit and for general corporate purposes, including investing in health care and seniors housing properties."

Magellan Midstream (NYSE: MMP  ) opened the valves on a $300 million cash pipeline with the sale of 30-year 5.15% paper. The money will pay down a revolving credit facility and capital expenditures.

Although this was a light week for debt issues, it's good to see some borrowing that should lead to economic activity. New vehicle sales, rebuilding cash used for a capital program, real-estate investment, and capital expenditures should all give the economy a little shot in the arm.

The Time to Start Investing Is Now
Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2672585, ~/Articles/ArticleHandler.aspx, 11/23/2014 4:40:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement