Whenever shareholders see that their company is taking on debt, pitchforks and torches can be seen at the front door of corporate headquarters. Despite our investor aversion to debt, it isn't always a bad idea. Chevron (NYSE:CVX) is in a position to show just that. The company just completed a $6 billlion bond issuance that will be used to refinance some of its current debt structure. Chevron isn't alone, either, Rio Tonto (NYSE:RIO) just did a similar bond move last week, and several other major American companies have done some big debt issuances in 2013.
Why are they doing it now? Debt is cheap. It's likely that the company wanted to make sure it got one last shot at cheap bonds ahead of the Federal Reserve meeting this week, which could decide the fate of the current quantitative easing program. In this video, Fool.com analysts Tyler Crowe and Aimee Duffy look at some of the reasons why these big debt buys are good for these companies.
Fool contributor Aimee Duffy has no position in any stocks mentioned. Fool contributor Tyler Crowe owns shares of Apple. You can follow them both on Twitter@TMFDuffy and @TylerCroweFool, respectively.
The Motley Fool recommends Apple, Bank of America, Chevron, and Goldman Sachs. The Motley Fool owns shares of Apple and Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.