Home Depot sells debt in Q2 to lock in ‘attractive’ interest rates

By Devika Patel

Knoxville, Tenn., Aug. 20 – Home Depot, Inc. took advantage of ‘attractive’ interest rates last quarter and sold $1.4 billion of senior notes in multiple tranches.

“During the quarter, we took advantage of an attractive interest rate environment and raised $1.4 billion of long-term debt, of which $1 billion was used to repay senior notes that came due in June,” chief financial officer and executive vice president of corporate services Carol B. Tome said on the company’s second quarter ended Aug. 4 earnings conference call on Tuesday.

Cash and cash equivalents were $2,547,000,000 as of Aug. 4, compared to $1,778,000,000 as of Feb. 3.

Long-term debt, excluding current installments, was $27,064,000,000 as of Aug. 4, compared to $26,807,000,000 as of Feb. 3.

On June 3, Home Depot priced $1.4 billion of senior notes (A2/A) in new and reopened tranches.

Home Depot priced $1 billion of 2.95% 10-year notes at 99.426 to yield 3.017% and a spread of Treasuries plus 93 basis points.

The company also priced a $400 million add-on to its 3.9% notes due June 15, 2047 at 102.542 to yield 3.751%, or a Treasuries plus 120 bps spread.

The 3.9% notes originally priced in a $750 million offering on May 24, 2017 at 99.316 to yield 3.939%, or a Treasuries plus 100 bps spread. The total outstanding is now $1.15 billion.

Barclays, BofA Securities, Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds were used to repay the company’s 2% notes due June 15, 2019 and for general corporate purposes.

Home Depot is an Atlanta-based home improvement retailer.

© 2015 Prospect News.
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