Everyday Low Prices Does Not Apply to Bonds
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