A Week of Refinancing

New U.S. corporate bond issues for the holiday-shortened week were just shy of $14 billion, with more than half the demand coming from outside the U.S.

Taiwan Semiconductor Manufacturing chipped in $1.5 billion of borrowing split between three- and five-year private issues. The money will be used for the ever-popular "general corporate purposes."

General Electric subsidiary General Electric Capital Corporation sold $1.4 billion spread across five-year floating and five-year fixed-rate issues. The SEC filings didn't have any details on uses for the money.

Specialty insurer Assurant issued five- and 10-year paper totaling $700 million. The money will be used "for general corporate purposes, including to repay $500 million of debt due in 2014." Even with the higher debt total, the move will save Assurant about $5.5 million per year in debt service costs.

Graphic Packaging boxed up $425 million in new eight-year paper. The high-yield issue proceeds -- if you can call 4.75% "high-yield" -- are being used to redeem $425 million of maturing 9.5% paper. The move saves Graphic Packaging about $20 million per year in debt service costs. That should be enough to move the needle at a company that reported $122.6 million in earnings last year, and it earns Graphic Packaging a place on My Watchlist.

Student housing REIT American Campus Communities rented $400 million with a 10-year-note issue. The money will be used "to repay the outstanding balance of its revolving credit facility, to fund its current development pipeline and potential acquisitions of student housing properties and for general business purposes."

Privately held First Data issued $815 million in eight-year, 10.625% notes. The deal was upsized from $500 million, and the money will pay for a tender offer for a 9.875% note that doesn't mature until 2015. This will cost First Data an additional $9 million per year in debt service costs if all of the existing notes are tendered. The only reason I see for the move is that the company is worried that rates will be higher or credit markets tighter in the future and it wants to lock in the refinancing now.

Companies refinancing debt or borrowing for whatever reason should be sending thank-you notes to the Federal Reserve. The zero-interest-rate policy and quantitative easing of $85 billion per month are holding rates down and making cheap money available for all kinds of general corporate purposes.

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