Banking & Finance

Corporate Bond Floodgates Open Wide (IBM, JNJ, DELL, HD, AGN, AXP, ATK, AON, HPQ, MHS, HSP, HCN, PH, GR, USB, BRK.B, FTE, CM)

If corporations have high credit ratings, there is an opportunity to borrow for rates that have not been seen in years (or ever).  August saw key bond issuances at extremely low rates from Johnson & Johnson (NYSE: JNJ) and from International Business Machines Corp. (NYSE: IBM), but this is nothing compared to what we are seeing in September.  We are not even a full work week into the month, there was Labor Day, and there is Rosh Hashanah starting Wednesday at sundown.  This month is already nearly double in planned corporate bond issuances from September-2009 with names such as Dell Inc. (NASDAQ: DELL), Home Depot Inc. (NYSE: HD), Allergan Inc. (NYSE: AGN), American Express Company (NYSE: AXP), Alliant Techsystems Inc. (NYSE: ATK), AON Corp. (NYSE: AON), Hewlett Packard Co. (NYSE: HPQ), Medco Health Solutions Inc. (NYSE: MHS), Hospira Inc. (NYSE: HSP), Health Care Reit Inc. (NYSE: HCN), Parker Hannifin Corporation (NYSE: PH), Goodrich Corp. (NYSE: GR), and U.S. Bancorp (NYSE: USB).  Berkshire Hathaway Inc. (NYSE: BRK.B) is getting a bond offering off for its BNSF rail unit and cross-border we have seen set offerings for France Telecom (NYSE: FTE), Canadian Imperial Bank of Commerce (NYSE: CM)

In August, IBM (NYSE: IBM) sold bonds at record low rates at 1% for 3-year notes, which would lead one to wonder why it did not issue more to go out on the curve. Johnson & Johnson (NYSE: JNJ) sold $1.1 billion via $550 million in 10-Year notes at 2.95% and $550 million in 30-Year bonds at 4.5%.

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