Now borrowing $$$ to buy back stock more quickly....

FedEx Sells $2 Billion of Debt in Three Parts

January 06, 2014


FedEx Corp., the world's largest cargo airline, sold $2 billion of bonds in three parts to accelerate a share-buyback program.

FedEx issued equal $750 million portions of 10-year, 4 percent bonds to yield 105 basis points more than similiar-maturity Treasuries and 5.1 percent, 30-year debt at a relative yield of 120 basis points and a $500 million portion of 4.9 percent, 20-year notes to pay 100 basis points more than benchmarks due in 2043, according to data compiled by Bloomberg.

Proceeds from the sale will fund the buyback, the Memphis, Tennessee-based company said today in a regulatory filing.

The offering is the company's first since a $750 million, two-part issue in April, Bloomberg data show.

The $500 million, 4.1 percent portion due April 2043 traded Dec. 18 at 86.2 cents on the dollar to yield 5 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Shares fell 0.95 percent to $138.72 at the close in New York.

FedEx gained 57 percent in 2013 as the company worked through a plan to cut operating costs by $1.7 billion over three years, chiefly at the FedEx Express unit, as shippers seek cheaper services.