Newspaper article St Louis Post-Dispatch (MO)

Business Joins the Rush to Refinance; Just as Homeowners Have Found, the Low Interest Rates Are Too Good to Pass Up

Newspaper article St Louis Post-Dispatch (MO)

Business Joins the Rush to Refinance; Just as Homeowners Have Found, the Low Interest Rates Are Too Good to Pass Up

Article excerpt

St. Louis homeowners aren't the only ones taking advantage of historic low interest rates. More than a half dozen local public companies, from Town and Country-based Charter Communications to Creve Coeur-based Monsanto, have issued new debt in recent months.

Corporations nationwide are frantically issuing bonds to finance operations, make acquisitions or refinance existing debt, to take advantage of the ideal borrowing conditions, analysts say.

U.S. corporate bond issuances were up more than 15 percent through July in 2012, compared with a year ago, according to the Securities Industry and Financial Markets Association. Last week, about $86 billion in 30-year bonds have been sold year-to-date, surpassing the total amount sold in 2011, according to the Financial Times.

"Just like consumers are locking in low rates for their mortgages, companies are locking in low rates ... for when the economy improves, even if they don't have an immediate need for it," said Brian Rehling, chief fixed income strategist with Wells Fargo Advisors in St. Louis. "There continues to be almost insatiable demand for fixed income securities."

Belden Inc., a cable maker based in Clayton, initially announced plans Monday to sell $550 million in senior subordinated notes, then upped the offering a day later to $700 million, based on robust investor demand.

"Investors are looking for quality investments that provide stable returns," said Matt Tractenberg, Belden's director of investor relations. The offering is Belden's largest to date. Belden plans to use the proceeds to pay down $550 million in higher- interest debt.

"We can borrow money at very attractive rates," he said.

This month, Clayton-based Olin Corp. announced a $200 million debt offering. Chesterfield-based Reinsurance Group of America and Ameren Illinois each priced $400 million offerings. Some of the world's largest public companies, including Philip Morris International, are jumping into the fray with bond issuances above the billion-dollar mark.

Mario DeRose, a fixed income strategist at Edward Jones in Des Peres, said investors are seeking alternatives to low-yielding Treasury debt. …

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