Last Weeks Bonds, with one to watch
Here's a summary of last week's corporate bond issues.
The holiday week dampened traffic, there was only about $14 billion in new paper with over half that coming from outside the US.
Most of the traffic was refinancing. Privately held First Data rolled out a junk issue at 10.625% to fund a tender offer for existing 9.875% paper that doesn't mature for two more years. The only reason I can think of for that move is the company wanted to hedge against the possibility of higher rates or tight credit later on.
In an much easier to understand move, Graphic Packaging (GPK) issued a 4.75% high-yield bond to take down some 9.5% paper. The move should save Graphic about $20 million per year. Considering it earned $122 mil last year, the refi should make a noticable improvement in earnings and earned GPK a place on my watchlist.