The Wall Street Journal reported that nonfinancial, corporate bond issues hit a record $29.7 billion last week. Let's see who's borrowing all that money and what they're doing with it.


Amount Issued

Coupon Rate


Aetna (NYSE: AET)

$500 million



Google (Nasdaq: GOOG)

$3.0 billion



Johnson & Johnson (NYSE: JNJ)

$4.4 billion

Floating – 4.85%


Kellogg's (NYSE: K)

$400 million



McDonald's (NYSE: MCD)

$400 million



Texas Instruments (NYSE: TXN)

$3.5 billion

Floating – 2.375%


Sources: Reuters and SEC filings.

Six companies accounted for about 40% of last week's corporate bond issue and the most common plan for the money among this group is paying off commercial paper.

Google, Johnson & Johnson, and Kellogg's plan on using the money to repay commercial paper. In each case, the company is paying off inexpensive commercial paper with higher-yielding debt. My Foolish colleague Rick Aristotle Munarriz raised the obvious question on Google's new debt -- why does a company with billions in cash need to hit the debt markets?

McDonald's doesn't say how it will use the money. Aetna will be paying off a maturing bond issue, and Texas Instruments plans to put the money toward its acquisition of National Semiconductor (NYSE: NSM). Separate from the bond issue, Aetna announced an increase in its share buyback program.

As a stock investor, it's easy to ignore the bond market, but a look at debt and how a company uses that money should be a part of Foolish investment research.

In a week with record corporate debt, at least three big firms are borrowing money to pay off less expensive commercial paper, and Aetna has arguably decided share buybacks are a better use of money than paying down debt. That looks like companies preparing for -- or at least protecting against -- climbing interest rates. Smart investors will join those CFOs and take a look at what higher interest rates would mean for their portfolios.

Are interest rates headed up soon or will cheap money be here for some time? Add your opinion with a comment below.

You can follow any of the stocks mentioned using our free watchlist service, My Watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.