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Everyday Low Prices Does Not Apply to Bonds



April 08, 2013 – Comments (0) | RELATED TICKERS: WMT

The big issuer in corporate bonds last week was Walmart (WMT).  Four issues totalling five billion at some pretty low coupon rates (low rates =  high prices in bonds).  The company stands to save quite a bit of money on interest payments if the money gets used to redeem maturing paper.

Barclays (BCS) sold a billion dollars of CoCo - or contingent convertible - bonds.  This is 10-year investment grade paper yielding 7.75%, but it's not so simple.  The contingent-convertible is if Barclays' Tier 1 common ratio falls below 7%, the bonds' value converts to zero.  Barclays sold a similar issue last fall.  The bank must have thought, buyers went for it last fall, let's try again. Hey, no worries, after all, what're the odds of a big, European bank running into captial trouble?

Home Depot financing a share buyback and DISH Network more than doubling the size of its offering round out the deals I thought were interesting.

More at the article.

Fool on!  Russ


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