The new notes have been sold with a 3.15% coupon for $500 million. Maturity date in 2031. The outstanding baby bonds fell today by a couple percent but still very over valued–it is a roll of the dice as to what happens here. If the company desired they could call all 3 issues of baby bonds.
Bond insurer Assured Guaranty US Holdings (AGO) will be selling a new $1,000 note.
The company may use the proceeds to redeem some of their baby bonds due in the next century.
The company has 3 issues outstanding with maturity dates in 2101, 2102 and 2103 with coupons of 6.875%, 6.25% and 5.60% respectively. These issues can be seen here.
These 3 issues have been callable since 2006, 2007, 2008 and the company is rated Baa2 by Moody’s and A by Standard and Poor’s. The company can garner a sub 5% if they desire (based on the maturity date).
Holders should be very cautious as I believe it is highly likely at least 1 issue will be called and very likely 2 issues. All of the issues are trading way above liquidation preference ($25)–with one issue 10% above–pain is potentially ahead.
Bob-in-DE was on top of this one.