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A Busy Week for Bonds

Russ Krull
November 14, 2011

The corporate credit markets served up a full plate last week, with Bloomberg reporting more than $38 billion in sales, the most in five months. Just three companies swiped their corporate credit cards for over one-third of the total. Who's doing all that borrowing and what are they doing with the money? Here are a few of the stories.

Amgen (Nasdaq: AMGN  ) led the borrowing charge with $6 billion in four issues ranging from three to 30 years with coupon rates from 1.875% to 5.15%. It will be using the money to place $5 billion worth of votes in the stock-versus-bond debate by purchasing its own shares. Amgen is the second company to announce a multibillion-dollar share buyback financed with bonds. Intel (Nasdaq: INTC  ) led the big equity-for-debt charge with a $5 billion buyback announcement in September. And Amgen isn't done. The SEC filing included this, "We expect to engage in financing activity, including this offering, to fund repurchases. Future funding may include issuance of additional senior notes (denominated in U.S. or foreign currencies), term debt and/or commercial paper."

Teva (Nasdaq: TEVA  ) rolled out $5 billion of new paper in issues ranging from 1.5 to 10 years with floating rates on the short stuff and coupons of up to 3.65% on the 10-year paper. It will be using the money to repay short-term debt used for its Cephalon acquisition. Teva shareholders should be pleased that today's low interest rates make that purchase a little less expensive.

Next in the multibillion-dollar club is miner Peabody Energy (NYSE: BTU